PAGENO="0001" VETERANS' EDUCATION AND EMPLOYMENT ASSISTANCE ACT OF 1976 HEARINGS BEFORE THE SUBCOMMITTEE ON READJUSTMENT, EDUCATION, AND EMPLOYMENT OF THE COMMITTEE ON VETERANS' AFFAIRS UNITED STATES SENATE NINETY-FOURTH CONGRESS FIRST SESSION ON S. 969 and Related Bills OCTOBER 1 AND 2, 1975 PART 4 Printed for the use of the Committee on Veterans' Affairs 0 U.S. GOVERNMENT PRINTING OFFICE 78-226 0 WASHINGTON: 1976 PAGENO="0002" FRANK J. Baizzi, ~~taff Director Gu~ H. MCMICHAEL III, General Counsel COMMITTEE ON VETERANS' AFFAIRS VANCE HARTKE, Indiana, Chairman HERMAN E. TALMADGE, Georgia CLIFFORD P. HANSEN, Wyoming JENNINGS RANDOLPH, West Virginia STROM THURMOND, South Carolina ALAN `CRANSTON, California ROBERT T. STAFFORD, Vermont RICHARD (DICK) STONE, Florida JOHN A. DURKIN, New Hampshire SUBCOMMITTEE ON READJUSTMENT, EDUCATION, AND EMPLOYMENT VANCE HARTKE, Indiana, Chairman HERMAN E. TALMADGE, Georgia ROBERT P. STAFFORD, Vermont ALAN `CRANSTON, California STROM THURMOND, South Carolina JOHN A. DURKIN, New Hampshire (II) PAGENO="0003" CONTENTS WEDNESDAY, OCTOBER 1, 1975 Opening Statement of Hon. Vance Hartke, chairman of the Subcommittee on Readjustment, Education, and Employment of the Committee on Page Veterans' Affairs Bill 5. 969, as referred to the Committee on Veterans' Affairs: Text of 8 Introductory statement of author, Senator Vance Hartke, excerpt from the Congressional Record, Mar. 5, 1975 10 Agency reports of: Veterans' Administration (No. 8, April 16, 1975) 15 Office of Management and Budget (No. 29, August 21, 1975)_ - - 18 Veterans' Administration transmittal letters (draft bills) to the President of the Senate, with enclosures: No. 90, February 26, 1976 19 No. 96, March 3, 1976 22 Text of Admt. No. 2005, to S. 99 (July 1, 1976) 2897 Agency reports of: Veterans' Administration (No. 120, July 22, 197) 2949 Department of Labor (No. 121, July 23, 1976) 2988 Department of Defense (No. 122, July 23, 1976) 2989 Office of Management and Budget (No.' 127, August 4, 1976)~ 3000 Congressional Budget Office: No. 126, August 4, 1976 2993 No. 138, September 9, 1976 3002 Bill 5. 817, as referred to the Committee on Veterans' Affairs: Text of 26 Agency reports of: Veterans' Administration (No. 3, March 27, 1975) 28 Office of Management and Budget (No. 5, April 11, 1975) 31 Bill S. 836, as referred to the Committee on Veterans' Affairs: Text of 32 Agency reports of: Office of Management and Budget (No. 23, August 12, 1975). - - 33 Veterans' Administration (No. 24, August 12, 1975) 34 Bill 5. 1371, as referred to the Committee on Veterans' Affairs: Text of 36 Agency reports of: Office of Management and Budget (No. 89, February 26, 1976)~ 40 Veterans' Administration (No. 91, February 27, 1976) 41 Bill S. 1805, as referred to the Committee on Veterans' Affairs: Text of Agency reports of: Veterans' Administration (No. 42, September 29, 1975) 46 Office of Management and Budget (No. 44, October 6, 1975)~. 54 ,Civil Service Commission (No. 50, October 28, 1975) 55 Bill S. 2100, as referred to the Committee on Veterans' Affairs: Text of Agency reports of: Veterans' Administration (No. 41, September 29, 1975) 58 Office of Management and Budget (No. 45, October 6, 1975). 60 Bill S. 2365, as referred to the Committee on Veterans" Affairs: Text of 61 Bill 5. 2487, as referred to the Committee on Veterans' Affairs: Text of 63 Agency reports of: Veterans' Administration transmittal letter (draft bill) to the President of the Senate (No. 2, February 6, 1975), with en- closure 65 White House transmittal letter (proposed bill) to the President of the S~nate (No. 9, May 7, 1975), with enclosure 68 (III) PAGENO="0004" Iv Bill S 2789, as referred to the Committee on Veterans' Affairs: Page Textof 71 Agency reports of: Congressional Budget Office (No. 109A, April 29, 1976) 82 Veterans' Administration (No. 135, August 31, 1976) 85 Bill S. 2995, as referred to the Committee on Veterans' Affairs: Text of 89 Agency reports of: Veterans' Administration (No. 128, August 6, 1976) 90 Office of Management and Budget (No. 129, August 9, 1976)~ 93 Bill S. 3225, as referred to the Committee on Veterans' Affairs: Text of 94 Agency reports of: Veterans' Administration (No. 136, August 23, 1976)... 101 Office of Management and Budget (No. 134, August 30, l976)~. 107 An act, H.R. 9576, as referred to the Committee on Veterans' Affairs: Text of 108 House of Representatives Report No. 94-487 to accompany H.R. 9576, September 18, 1975 114 Agency reports of: Veterans' Administration (No. 79, February 11, 1976) 156 Office of Management and Budget (No. 88, February 26, i976)~ 166 Statement of- Rufus H. Wilson, Chief Benefits Director, Department of Veterans' Benefits accompanied by Andrew H. Thornton, Director of Educa- tion and Rehabilitation Service; June S. Schaeffer, Assistant Deputy Director for Policy and Projects; Clarence G. Greenland, Director of Budget Staff; James Cox, Director of Veterans Assistance Service; Gerard T. Cawley, Director of Management Appraisal Staff; Wil- ham G. Malone, Assistant General Counsel; and Robert Dysland, Deputy Assistant General Counsel, Veterans' Administration 304 Donald H. Schwab, director, National Legislative Service, Veterans of Foreign Wars of the United States 1025 Robert E. Lyngh, deputy director of National Veterans Affairs and Rehabilitation Commission, The American Legion, accompanied by Edward J. Lord, assistant director of National Legislative Com- mission 1028 Charles Garefino, director at large, National Association of Concerned * Veterans, accompanied by Timothy Craig, legislative director 1038 Charles L. Huber, national director of legislation, Disabled American Veterans 1637 THURSDAY, OCTOBER 2, 1975 Opening statement of Hon. Vance Hartke, Chairman of the Subcommittee on Readjustment, Education, and Employment of the Committee on Veterans' Affairs 1901 Statement of- Donald G. Brotzman, Assistant Secretary of the Army, Manpower and Reserve Affairs 1902 Dr. Abel B. Sykes, Jr., president, Compton Community College, the American Association of Community and Junior Colleges 2633 Dr. John 0. Eidson, vice chancellor, University System of Georgia 2651 C. A. McKinney, director of legislative affairs, Non Commissioned Officers Association of the United States of America 2662 John A. Lancaster, administrative assistant, Paralyzed Veterans of America 2668 Richard Shaffner, assistant division chief, Division of Programs to Advance Veterans Education, Bureau of Equal Opportunity, Penn- sylvania Department of Education 2670 Ron Bitzer, coordinator of Swords to Plowshares, San Francisco, Calif 2703 PAGENO="0005" V Miscellaneous- Communications Concerning the GI bill received by Senator Robert T. Stafford, ranking minority member of the Subcommittee on Read- justment, Education, and Employment, from: Page Daniel J. Batchelder (September 23, 1975) 4 Jeffrey P. Reeder, site coordinator, Johnson State College (September 25, 1975) Thomas Donneflan Bill Sarris, Class of `77 VLS (September 26, 1975) 6 Frederick A. Partyka, Jr., with attachment (September 26, 1975)~ 6 Communications concerning the implementation of the provisions of the Vietnam Era Veterans' Readjustment Assistance Act of 1974 received by the Committee, from: Committee letter, dated May 20, 1975 167 VA responses, dated: June 19 1975 172 September 30 1975 184 Continuation of GI Bill Training After the Use of "Free Entitlement" (October 22, 1976). 189 Report on Veterans' Administration's On-Job Training Program (B- 178741) (July 9, 1975) 207 Veterans' Administration OJT Outreach Efforts Report, with letter of transmittal, dated June 21, 1976 214 Veterans Benefits Under Current Educational Programs (Information Bulletin DVB lB 20-76-5, April 1976) 221 Communications concerning the education loan program received by the Committee, from: VA letter, dated January 10, 1975 308 DVB circular 20-74-113: Appendix C (January 9, 1975) 309 Change 2 (January 20, 1975) 320 Change 4 (March 13, 1975) 321 Change 7 (June 16, 1975) 322 DVB circular 20-75-47 (May 8, 1975) 323 VA regulations, vocational rehabilitation and education-trans- mittal sheet 431, with changes (July 21, 1975) 325 Chapter 14-VA education loans, change 2 with sample forms (October 14, 1975) 338 VA Education Loans for Veterans and Dependents, VA pamphlet 22-75-5 (October 1975) 349 Robert L. Anderlie, Michigan State University, letter dated October 29, 1975 351 Communications Concerning vocational courses and the 50 percent rule received by the Committee, from: Career-Oriented Studies: the Debate Intensifies, an article from the Chronicle of Higher Education (February 9, 1976) 358 Public Affairs Report, by the Institute of Governmental Studies, University of California, Berkeley (February 1976) 361 Training by Correspondence Under the GI Bill (August 10, 1976).. 368 Correspondence on the above VA study, addressed to Chairman Vance Hartke, from Linden and Deutsch, New York, N.Y. (December 3, 1976) 422 Reply from Richard L. Roudebush,. Administrator of the Veterans' Administration, to the firm of Linden and Deutsch (January4, 1977) 431 Occupational Graduate Employment Report, an analysis of the 50 percent employment criterion for VA approved vocational courses, prepared by the Veterans' Administration (August 1976) Results of GAO Review On the Implementation of Certain Provisions of the Vietnam Era Veterans' Readjustment Assistance Act of 1974 (September 17, 1976) 518 Protecting the Consumers of Education, an article from the Washington Post (April 3, 1975) 540 PAGENO="0006" VI Miscellaneous-Continued Report on Erroneous, Misleading, or Deceptive Advertising Practices, Page Fiscal Year 1976 (September 29, 1976) 542 Consumer Protection and Veterans Educational Training Programs, an excerpt from the Congressional Record (July 9, 1975) 569 Report of Station Committee on Educational Allowances 606 Vet Reps on Campus 614 Task Force Report, VA Accounts Receivable Study (March 1975) (enclosure 4) 637 Overpayments of Readjustment Benefits of the Veterans' Administra- tion, a study by the House Appropriations Committee staff (March 5, 1976) 899 Educational Assistance Overpayments, a Billion Dollar Problem- A Look at the Causes, Solutions, and Collection Efforts, a report to Congress by the General Accounting Office (March 19, 1976) 922 Compilation of communications on the problems of the GI bill benefits received by the Committee: William H. Hamilton, vice chairman, Task Force One, Oxnard, Calif., dated August 1, 1975 987 Jay Henderson, legislative director, National Student Lobby, Washington, D.C., dated October 1, 1975 988 Hon. Edward P. Beard, a U.S. Representative from the State of Rhode Island, dated October 8, 1975 989 Hon. Don H. Clausen, a U.S. Representative from the State of California, dated October 9, 1975 990 Paul A. Johnson, president, First Federal, Great Falls, Mont., dated October 20, 1975 991 Hon. George Mahon, a U.S. Representative from the State of Texas, dated October 23, 1975 993 Staff Sergeant Rebecca S. Hitt, USMC, dated October 16, 1975 994 Barbara H. Yonemura, PREP teacher, Darmstadt American School, APO New York 09175, dated October 31, 1975 995 Mary-Margaret O'Connell, instructor, Palomar College PREP, San Marcos, Calif., dated November 12, 1975 997 John F. Prince, resident, Maricopa County Community College District, Phoenix, Ariz., dated December 1, 1975. 999 Bob Jett, director, Office of Veterans Affairs, University of South Florida, Tampa, Fla., dated April 20, 1976 1001 Jan Raymond, veterans affairs coordinator, Grossmont College, El Cajon, Calif., dated May 20, 1976 1003 Vets Helping Vets, Colorado-Veterans Outreach, with attachment, dated June 4, 1976 1008 W. W. Washburn, executive director, University of Washington, dated June 28, 1976 1012 Couple takes advantage of disaster situation, an article from the Arizona Republic, dated July 31, 1975 1014 James L. Bemis, European project director, Big Bend Com- munity College, Moses Lake Washington, N.Y., dated August 26, 1976 1015 Willie L. Lowe, Jr., Jackson Fla., dated September 4, 1976 1017 Kenneth E. Young, president, Council on Post-secondary Accreditation (COPA), dated October 18, 1976 1018 National League of Cities, U.S. Conference of Mayors report, entitled: Findings and Recommendations of the Special Veterans' Oppor- tunity Committee, based on public hearings (September 13, 1973) 1043 Geography Controls GI Bill Opportunities (November 11, 1974)~ 1091 Education Tuition Assistance Study-November 1975 (December 3, 1975) 1128 Voucher Funding of Training: A Study of the GI Bill (October 1976)~. 1362 PAGENO="0007" VII Miscellaneous-Continued Articles from The Chronicle of Higher Education, dated April 5, 1976, entitled: ~ Page Colleges Will Charge 8 Pct. More in Fall 1500 Tuition and Fees at Over 2,000 Colleges 1502 Excerpts from the States and Higher Education, A Proud Past and a Vital Future, articles entitled: Commentary of the Carnegie Foundation for the Advancement of Teaching 1531 Supplement to the above report 1540 Report on Veterans' Responses to VA Educational Assistance Pro- grams (August 11, 1976) 1549 Data on Vietnam Era Veterans (October 15, 1976) 1589 Annual Report on Relief from Administrative Error (July 14, 1975):~ 1641 Communication from the Veterans' Administration in reference to their appearance before the Committee on October 1, 1975, with enclosures, dated November 26, 1975 1655 Completion Rates for Education and Training Tinder the Vietnam Era GI Bill (August 10, 1976) 1665 Minutes of meeting-Interagency JPV Advisory Committee (Work Group), dated: June 9, 1975 1696 July 8, 1975 1699 August 22, 1975 1704 October 3, 1975 1707 Compilation of excerpted news articles concerning certain schools and VA benefits received by the Committee 1710 Educational Vocational Opportunities Survey (TRADOC) (July 1975) 1910 Manpower Research and Data Analysis Center (MARDAC), pre- liminary results (May 1975 AFEES Survey) 2018 Educational Benefits Analysis, an examination of the effects of GI bill education benefits on service accessions (HUMRRO) (Novem- ber 1975) 2155 Conclusions and Implications from the Analysis of Educational Benefits (HTJMRRO) (February 1976) 2307 A College President and an Army General Want to Tell You About a New Plan That Lets You Enlist in the Army and Start College at the Same Time, an advertisement from the Reader's Digest Magazine 2344 Join the People Who've Joined the Army, an Army recruiting pam- phlet 2351 Excerpts from the statement of Hon. William K. Brehm, Assistant Secretary of Defense for Manpower and Reserve Affairs, before the Committee on Armed Services, dated December 13 and 14, 1973~ 2366 Military Pay Muddle, excerpts from a study by the Brookings Insti- tution, Washington, D.C 2367 Value of Quality Soldiers to the Army, memorandum by the Depart- ment of the Army, with enclosures (May 27, 1975) 2375 Youth in Transition, volume V, excerpts by the Institute for Social Research, University of Michigan, Ann Arbor, Mich 2408 Promise of Paid Schooling May Be Crucial for Best All-Volunteer Military, Researchers Say, an article from the TSR Newsletter_ -- 2424 Correspondence on the implications of terminating educational bene- fits between Chairman Vance Hartke and Jerald G. Bacham, Ph. D., program director/research scientist, Institute for Social Research, University of Michigan: Committee letter, dated December 23, 1975 2426 Institute for Social Research response dated January 9, 1976 2427 The "Military Mind" & the All-Volunteer Force, excerpt from Soldiers, Sailors & Civilians (November 1975)_ 2430 "Citizen Force" or "Career Force"?, Implications for Ideology in the All-Volunteer Army, excerpts from the Armed Forces and Society, vol. 2, No. 1 (November 1975) 2441 PAGENO="0008" VIII Miscellaneous-Continued Defense Manpower: the Keystone of National Security, excerpts from Report to the President and the Congress by the Defense Page Manpower Commission (April l976)~~ 2457 Dialogue of an All-Volunteer Army: Chapter I-The Dangers of an All-Volunteer Army 2471 Chapter Il-Another View of an All-Volunteer Army 2476 A Reporter at Large, articles from the New Yorker: All-Volunteer-I, dated November 24, 1975 2481 All-Volunteer-IT, dated December 1, 1975 2495 Excerpts from Contributory Vesting as a Veterans' Educational As- sistance Alternative by the Congressional Research Service (CRS) (June 23, 1976) 2507 CRS letter to William K. Brehm, Assistant Secretary of Defense for Legislative Affairs, dated April 20, 1976 2511 Defense Department response, dated June 11, 1976 2513 CRS letter to F. David Matthews, Secretary of Health, Education, and Welfare, dated April 20, 1976 2514 HEW response, dated June 15, 1976 2516 Racial Composition in the All-Volunteer Force, an article from the Armed Forces and Society (November 1974) 2519 All-Volunteer Doubts, an article from the Washington Star (April 19, 1976) 2527 Air Force Recruits Would Shun a Fight, an article from the Wash- ington Post (August 20, 1976) 2527 Privacy Act "Hiding" Recruits, an article from the Army Times (May 3, 1976) 2528 Excerpts from statement by Donald G. Brotzman, Assistant Secretary of the Army, before the Committee on Armed Services (February 5, 1976) 2529 Excerpts from the report of Donald H. Rumsfeld, Secretary of De- fense, to the Congress on the fiscal year 1977 budget and its imple- mentations for the fiscal year 1978 authorization request and the fiscal year 1977-1981 defense programs (January 27, 1976) 2529 Excerpts from the Manpower Hearings before the Committee on Armed Services: Part 3 (February 4, 6, 16, 18, and 23, 1976) 2531 Part 7 (February 24, March 1, 8, 12, 19, 1976) 2563 Problems resulting from management practices in recruiting, training, and using non-high-school graduates and category IV personnel, a report by the General Accounting Office (January 12, 1976) 2566 Excerpt from An Assessment of All-Volunteer Force Recruits, a report to the Congress by the General Accounting Office (February 27, 1976) 2607 Educational Benefits and the All-Volunteer Force, by Charles C. Moskos, Jr. and Morris Janowitz (spring 1976) 2624 Letter to Hon. William A. Steiger, a U.S. Representative from the State of Wisconsin, from Robert J. Murray, Deputy Assistant Secretary of Defense, dated November 12, 1975 2630 Communications concerning the present reporting fee received by educational institutions for certifying veterans and their depend- ents received by the Committee, from: Hon. John V. Tunney, a U.S. Senator from the State of California, dated July 7, 1976 2638 Jim Remillard, director, California State University, Chico, Calif.~ dated August 25, 1975 2640 Edward R. Mendez, director, San Diego State University, San Diego, Calif., dated August 26, 1975 2642 Wilfred Michael, superintendent-president, Cerritos College, Norwalk, Calif., dated August 26, 1975 2643 Michael J. Keeton, veterans program advisor, MiraCosta College, Oceanside, Calif., dated August 27, 1975 2644 Hon. Alan Cranston, a U.S. Senator from the State of California, to Michael J. Keeton, dated June 4, 1976 2646 Michael J. Keeton, chairman, San Diego County Veterans' Task Force, San Diego, Calif., with enclosure, dated May 6, 1976 -- 2647 PAGENO="0009" Ix Miscellaneous-Continued Communication from James F. Nickerson, director, Servicemen's Opportunity of the American Association of State Colleges and Page Universities, dated May 27, 1975 2654 A sample poll of college and community reaction to a probable end to the GI bill, by the Servicemen's Opportunity College (May 19-23, 1975) 2656 Report on the Characteristics and Needs of Veteran-Inmates in Pennsylvania State Correctional Institutions (May 30, 1975) 2675 Written statement of Laura M. Trexier, National Association of College Admissions Counselors, dated October 2, 1975 2706 Gatekeepers in education, a report on institutional licensing by the National Advisory Council on Education Professions Development (April 1975) 2710 Toward a Federal Strategy for Protection of the Consumer of Educa- tion, a report of the Subcommittee on Educational Consumer Pro- tection, HEW (July 1975) 2741 Is There Fraud in Education?, a viewpoint from the Change (Decem- ber 1976) 2816 Through Education to Earnings?, a book review sponsored by the National Academy of Education, 1976 2819 U.S. Civil Service Commission letter requesting consideration to modify the publication requirement under Public Law 93-508, dated May 18, 1976 2892 Excerpts from the Congressional Record, July 2, 1976, S. 969- Veterans' Education and Employment Assistance Act, Amendment No. 2005, introductory statement of author, Chairman Vance Hartke 2894 Text of Admt. No. 2005, to S. 969 (July 1, 1976) 2897 Agency reports of: Veterans' Administration (No. 120, July 23, 1976) 2949 Department of Labor (No. 121, July 23, 1976) 2988 Department of Defense (No. 122, July 23, 1976) 2989 Office of Management and Budget (No. 127, August 4, 1976) - - - 3000 Congressional Budget Office: No. 126, August 4, 1976 2993 No. 138, September 9, 1976 3002 Communications expressing views on Amendment No. 2005, to S. 969, as received by the Committee, from: Hon. Walter F. Mondale, a U.S. Senator from the State of Min- nesota, dated July 1, 1976 3009 Veterans of Foreign Wars, Washington, D.C., dated July 15, 1976 3049 Non Commissioned Officers Association, Washington, D.C., dated July 15, 1976 3051 The American Legion, Washington, D.C., with resolutions, dated July 19, 1976 3056 Disabled American Veterans, Washington, D.C., dated July 20, 1976 3065 Universal Training Service, Inc., Miami, Fla., dated July 20, 1976 3072 Paralyzed Veterans of America, Washington, D.C., dated July 22, 1976 3076 lona College, New Rochelle, N.Y., dated July 22, 1976 3082 San Diego Community College District, San Diego, Calif., dated July 22, 1976 3086 American Veterans of World War II, Korea and Vietnam, Wash- ington, D.C., dated July 26, 1976 3087 Florida State University, Tallahassee, Fla., dated July 26, 1976 3092 The American Legion, St. Paul, Minn., dated July 27, 1976 3093 Department of Education, Columbia, S.C., dated July 27, 1976 3094 The American Legion, Washington, D.C., dated July 28, 1976. - - - 3098 Directorate DODD5EUR PREP Administration, New York, N.Y.,datedAugust4, 1976 3107 Barstow College, Barstow, Calif., dated August 5, 1976 3113 Northwestern State University of Louisiana, Natchitoches, La., dated August 5, 1976 3114 PAGENO="0010" x Miscellaneous-Continued Communications expressing views on Amendment No. 2005-Con. Directorate Department of Defense Dependents Schools, New Page York, N.Y., dated August 5, 197& 3115 Hon. Charles McC. Mathias, Jr., a `U.S. Senator from the State of Maryland, dated August 6, 1976 3117 Metropolitan State College, Denver, Cob., dated August 9, 1976 3121 The American Legion, Washington, D.C., dated August 11, 1976 3122 The American Legion, Phoenix, Ariz., dated August 11, 1976 - - 3123 Steed College, Johnson City, Tenn., dated August 11, 1976 3124 California State University, Sacramento, Calif., dated August 13, 1976 3126 Department of Education, Columbia, S.C., dated August 13, 1976 3128 American Council on Education, Washington, D.C., dated August 16, 1976 3129 St. Louis High School, Honolulu, Hawaii, dated August 16, 1976 3133 Empire State College, Saratoga Springs, N.Y., .dated August 16, 1976 3137 Department of Education, Columbia, S.C., dated August 16, 1976 3138 Tennessee State University, Nashville, Tenn., dated August 16, 1976 3140 Waynesville R-VI Schools, Waynesville, Mo., dated August 18, 1976 3142 American Preparatory Institute, Killeen, Tex., dated August 18, 1976 3144 Georgia Veterans Association, Athens, Ga., dated August 19, 1976 3146 Bryant & Stratton, Buffalo, N.Y., dated August 19, 1976 3148 Rudledge College, Greenville, S.C., dated August 19, 1976 3150 Association of Independent Colleges and Schools, Washington, D.C., dated August 24, 1976 3152 Department of Education, Columbia, S.C., dated August 24, 1976 3159 Fairfax County Public Schools, Fairfax, Va., dated August 24, 1976 - 3161 Veterans of Foreign Wars, Washington, D.C., with resolutions, dated August 26, 197t1. 3162 National Association of Concerned Veterans, Washington, D.C., dated September 1, 1976 3181 American Veterans of World War II, Korea and Vietnam, Wash- ington, D.C., dated September 3, 1976 3187 University of Louisville Veterans' Club, Louisville, Ky., dated September 3, 1976 3188 University of Kentucky, Fort Campbell, Ky., dated September 8, 1976 3189 Davenport Coflege of Business, Grand Rapids, Mich., dated September 8, 1976 3191 National College of Business, Rapid City, S. Dak., dated Septem- ber 14, 1976 3194 Thomas Nelson Community College Hampton, Va., dated September 15, 1976 3196 Army Education Center, Kitzingen, N.Y., dated September 22, 1976 3198 National Association of Institutions for Military Education Services, Torrance, Calif. dated September 30, 1976 3203 National Black Veteran Organization, Inc., Washington, D.C - - 3204 Communications concerning the flight training program received by the Committee, from: Legislative History of Flight Training Under the GI Bill, as prepared by the Congressional Research Service 3205 Sikorsky Aircraft, Stratford, Conn., dated June 9, 1976~~_ -- -- 3213 Air Taxi & Commercial Pilots Association Washington, D.C., dated July 16, 1976 3216 PAGENO="0011" XI Miscellaneous-Continued Communications concerning the flight training program-Con. Air Line Pilots Association, Washington, D.C., dated July 30, f'age 1976 3218 Aircraft Owners and Pilots Association, Washington, D.C., dated August 2, 1976 3219 National Air Transportation Associations, Washington, D.C., datedAugust2, 1976 3220 J. Michael McKeon, Royal Oak, Mich 3222 Gus Ritter, Woodstock, Ill., dated September 2, 1976 3223 Silver Wings Aviation, Inc., Rapid City, S. Dak., dated Septem- ber 27, 1976 3224 Table- Education Account Receivable 632 Resolutions of veterans' organizations: Veterans of Foreign Wars, with letter 1027 The American Legion, with letters. 1032 Disabled American Veterans 1638 Questions and answers- Response of the Veterans' Administration, to written questions sub- mitted by Senator Strom Thurmond, a U.S. Senator from the State of South Carolina (enclosure 5), with enclosures 868 Response of Assistant Secretary of the Army Donald G. Brotzman, to written questions submitted by: Hon. Strom Thurmond, a U.S. Senator from the State of South Carolina 1906 Hon. Robert T. Stafford, a U.S. Senator from the State of Vermont 2151 APPENDICES Appendix A.-Excerpts from Senate Report No. 94-1243, to accompany S. 969-Veterans' Education and Employment Assistance Act of 1976 (September 16, 1976) 3227 Appendix B.-Text of amendments to S. 969 are as follows: No. 2318 (September 17, 1976) 3449 No. 2333 (September 21, 1976) 3451 No. 2334 (September 21, 1976) 3454 No. 2335 (September 21, 1976) 3457 Appendix C.-Excerpts from the Congressional Record, October 1, 1976, S. 969-Veterans' Education and Employment Assistance Act of 1976, as passed the Senate with amendments 3461 Appendix D.-Excerpts from the Congressional Record, October 1, 1976, S. 969-Veterans' Education and Employment Assistance Act of 1976, as passed the House with amendments 3505 Appendix E.-Public Law 94-502, 94th Congress, 5. 969, October 15, 1976 3531 PAGENO="0012" PAGENO="0013" VETERANS' EDUCATION AND EMPLOYMENT ASSISTANCE ACT OF 1976 THURSDAY, OCTOBER 2, 1975 U.S. SENATE, SUBCOMMITTEE ON READJUSTMENT, EDUCATION, AND EMPLOYMENT OF THE COMMITTEE ON VETERANS' AFFAIRS, Washington, D.C. The subcommittee met, pursuant to notice, at 10 a.m., in room 4200, Dirksen Office Building, the Honorable Vance Hartke (chairman of the Subcommittee on Readjustment, Education, and Employment, presiding. Present: Chairman Vance Hartke, presiding; Senators Robert T. Stafford and Strom Thurmond. Also present: Frank J. Brizzi, staff director and Guy H. McMichael III, general counsel. [CONTINUATION OF HEARING ON OCTOBER 2. 1975. FROM PART 3] Chairman HARTKE. The next witness is the American Association of Communit.y and Junior Colleges. Dr. Abel Sykes, Jr., president of Compton Community College. STATEMENT OP DR. ABEL B. SYKES, 1R., PRESIDENT, COMPTON COMMUNITY COLLEGE, THE AMERICAN ASSOCIATION OP COM- MUNITY AND IUNIOR COLLEGES Dr. SYKES. I am Abel Sykes, Jr., president of Compton Community College in California and the chairman of the American Association of Community and Junior Colleges' board of directors. Accompany- ing me today is Dr. John E. Tirrell, vice president for governmental affairs of AACJC. In addition to having many veterans on my campus and representipq a State with a large number of veterans. I had the opportunity to visit South Vietnam a few years ago during the conflict. As a result of this visit, the American Association of Community and Junior Colleges programs for servicemen and veterans, and later the Servicemen's Opportunity College, were developed. The Servicemen's Opportunity College has since grown to include other institutions of higher educa- tion and with Carnegie Corporation and Department of Defense funding there are now 159 community colleges and 176 4-year colleges participating. My statement on veterans educational benefits is being submitted on behalf of the America.n Association of Community and Junior Col- leges (AACJC) and its member institutions. Some 60 percent of veter- ans attending institutions of higher education are enrolled in corn- (2633) PAGENO="0014" 2634 munity and junior colleges. AACJC institutions are very appreciative of the actions this subcommittee has taken over the years to provide educational assistance for American veterans. Briefly, for the record, we would like to offer for your consideration the views of our member institutions on the extension of benefits to 45 months, the costs of administering the program, the PREP pro- gram, and the very existence of the GI bill itself. As you are aware, the House Veterans Committee voted out a bill that included the extension of educational assistance benefits from 36 to 45 months without restriction as to whether undergraduate or graduate education could be pursued. We support that provision for a number of reasons, most of which are apparent. The educational re- quire.ments needed to compete for many jobs in today's job market have been increased beyond the undergraduate level. A great many more people are pursuing their studies on a part-time basis, thus increasing the time needed to complete their programs. There should be no discrimination between graduate and under- graduate degrees, nor should there be a requirement that the veteran be enrolled in an institution at the time he or she. requests the extension. We urge that this provision be reported favorably out of this commit- tee as soon as possible to remove. this restriction. Second, since there will be thousands of veterans for the next 10 years, and Veterans' Administration figures indicate currently over 600,000 as enrolled in community colleges, we have a concern for the administrative costs for processing a veteran. Community colleges are reimbursed $3 per veteran for these costs, with an additional dollar paid for each veteran the institution certifies for advance payment. While at one time the reimbursement may have been sufficient, the more detailed reports required and tightening of accountability now make that figure seriously deficient. The requirement to recertify each veteran for each school year rather than for the 2-year enrollment period has also increased the workload on the staffs of veterans affairs offices in community col- leges. Recent directives from the Veterans' Administration concerning cooperative education restrictions, work-study limitations and audit requirements have also increased the workload significantly. Some of our California community colleges have a shortage of adequate help which has made it increasingly difficult for them to process the paper- work necessary for the veteran-student to receive subsistence payments on time. The $3 per veteran reimbursement to educational institutions for administrative costs does not begin to approach the actual costs. In an AACJC spot check of 13 community colleges enrolling more than 28,000 veterans, the average cost of administration was about $10 per veteran. This is an average loss of more than $6 to the college for each veteran. The average cost per veteran at the colleges contacted ranged from $4.10 to $13.33, depending on services offered, salaries, and the * inclusion of supplies in cost figures. Among 16 other community col- leges responding to our inquiry about the costs of administration for veterans, only one thought that the $3 actually covered the costs of administration (see example in appendix I). There is a need to increase the reimbursement figure. While com- munity colleges are willing to support some administrative costs for PAGENO="0015" 2635 the veteran, the loss now incurred by the colleges is more substantial than it was a few years ago, and we believe the $3 reimbursement figure is no longer reasonable. A reimbursement figure of $6 per veteran, and an additional dollar, or $7, for advance payment, would more adequately enable the col- leges to register a veteran without great financial loss. Thus, we urge the subcommittee to act to increase the reimbursement to educational institutions for processing veterans. Third, we oppose the elimination of the prediseharge education program, or PREP. PREP has allowed military personnel preparing to leave the service to bring themselves up to a high school level pro- ficiency, and has offered a second chance for many undereducated servicemen. Our most serious objection to the House bill, however, is the termi- nation of the GI bill for persons entering the armed services after December 31, 1975. As no one entering the military service on or after January 1, 1976, would be eligible for receipt of educational assistance, the GI bill would be effectively ended. Our member institutions support the continuation of educational benefits for young men and women volunteering for military service. Our concerns for the GI bill are best stated in chapter 34, education benefits, subchapter I, which outlines the purpose of the law. This subchapter gives four reasons why "The. Congress declares" that the bill is necessary. One is readjustment and lost opportunities. Another is "enhancing and making more attractive service in the Armed Forces," and another is "extending the benefits of a higher education to qualified and deserving young persons who might other- wise not be able to afford such an education." We think those of us who support continuation should stress our belief that the GI bill continues to be a way in which a great many `young people, including many from lower income and minority families, may have a chance they otherwise would not have for further education. As a case in point, the only Puerto Rican president of a college in the United States, in testimony before the House Subcommittee on Postsecondary Education, just 3 weeks ago noted that it was through the veterans benefits that he was able to pursue his own education. Cases of other minority and low-income persons who have advanced their education, careers, and I might add, public service, are in abundance. I might add also that I managed my education through the same route. The characteristics of veterans using the GI bill differ significantly from those of the i~eneral student population. According to a special analysis in the 1971 American Council on Education (ACE) survey of first-time, full-time students, titled "The Vietnam Era Veteran Enters Colle~re" (ACE, Office of Research, 1972') veterans tend to have poorer high school academic records than male nonveterans, and lower educe tional aspirations upon entrance to college. Veterans express less concern ahouf~ financing their education than their freshmen peers. indicating the importance of their GT benefits. Veterans also plan business or technical maiors and careers more than other male freshmen. end are less hkely to be planning profes- sional careers. Veterans' institutional decisions are more likely to be PAGENO="0016" 2636 based on proximity to home, or special educational programs, and less on institutional reputation than other male freshmen. The factors in choosing an institution are quite different for a 17- year-old high school graduate than for a veteran in his mid-20's who is more likely to have a family and/or financial responsibilities, less mobility, and a desire to acquire a marketable skill in the shortest time possible. Furthermore, our colleges have made special efforts to accommodate veterans and their special needs, are more likely to accept veterans upon discharge at any time of year, and do not require applications far in advance. In addition to the broad social objectives discussed above, the role which the GI bill continues to play in the maintenance of our military establishment's strength should be considered. The armed services have wanted the GI bill as a recruitment device, especially for higher ability people, and feel they would lose a large number of these people without the GI bill educational benefits. A survey conducted by the Army Testing Service last September re- vealed that one of every four individuals tested indicated he would not have enlisted had it not been for the availability of GI educational benefits. When these servicemen were asked to list their three most important reasons for joining the service, 50 percent listed postservice educa- tional benefits. The Department of Defense in national advertising has used the GI bill as a recruiting tool and recently stated educational benefits are important to recruiting. The GI bill is also used for edu- cation and upgrading within the Armed Forces. because military per- sonnel may use the benefits after 180 days of service. Moreover, it has been shown that for every dollar spent on the GI bill at least $3 have returned to the Government in the form of higher taxes paid by those with more education. Veterans educational assist- ~nce benefits continue to be a source of opportunity, of upgrading our labor force, and a measure of reward for those who have served their country and in addition has given back to the country over three times what it has cost. It is difficult to understand why at this point in our history, when the GI bill has proven itself and continues to receive plaudits, that this classic model for the extension of education within a democratic tradi- tion should be terminated. It is of utmost concern to us that this bene- fit. which has been tried and found true, should continue. We thank the subcommittee for the opportunity to appear, for its attention, and consideration of our views. I will be. pleased to attempt to answer any questions you might have. Chairman HARTKE. I want to thank you for a fine statement. Senator Stafford? Senator STAFFORD. I don't. have any questions. I do think the testi- mony will be helpful to the subcommittee. Chairman HARTKE. Yes. The question of reimbursement is a matter we'll go into in depth. We appreciate your information on PREP and the statement on the GI bill. It's a ~ery comprehensive statement and we appreciate it. Dr. SYKES. Thank you, sir. PAGENO="0017" 2637 [The appendix of Dr. Sykes' statement follows:] APPENDIX I-TYPICAL COSTS FOR ADMINISTERING VETERANS' BENEFITS Estimated college costs for handling veterans certification at Community College of Allegheny County, Pittsburgh, Pa. Personnel and percentage of salary Amount Certification clerk, 100 percent $7, 589. 00 Secretary, 40 percent 2, 654. 40 Veterans' Affairs office: Allegheny, 30 percent 2, 794. 50 Boyce, 20 percent 1, 620.00 South, 20 percent 1, 620, 00 Veterans' Affairs director, 30 percent 4, 950. 00 Part-time employee 1, 200. 00 Subtotal 22, 427. 90 Postage (yearly) 1, 000. 00 Paper/envelopes (yearly) 200. 00 Total 23, 627. 90 Received from Veterans' Administration (approximate) 8, 000.00 Cost to college 15, 627. 90 The estimated costs above are conservative in that they represent only the expenses which are directly related to veterans certification. Number of veterans enrolled at college, 2,800. Cost per veteran for adminis- tration, $8.44. [Subsequently, the following material concerning VA reimburse- ment fees was ordered placed in the record at this point:] 78-226 0-77 -2 (Pt.4) PAGENO="0018" 2638 ~iCnitc~l ~f~c%~fc~s ,$~encLtC WASHINGTON. D.C. 20510 July 7, 1976 The Honorable Vance Hartke Senate Veteran's Affairs Committee Suite 414 Russell Senate Office Building Washington, D.C. Dear Vance; A problem has recently been brought to my attention regarding the reimbursement of educational institutions for the certif- ication of veterans, A survey of the ten public colleges and universities in the San Diego area, initiated by the San Diego County Veterans Task Force, was completed the first of this year, The statistics provided indicate that the cost of the certification process far exceeds the fees which these instit- utions receive from the Veterans Administration. This problem, as I am sure you realize, is not indigenous to the San Diego area alone, A GAO report completed in March 1976 suggests that in light of rising school operating costs, throughout the U, 5,, the V.A should reevaluate the current $3 reporting fee, It is my understanding that within the educational amendments to this years G.I, Bills there is a provision that will increase the amount of compensation schools receive for administrative activity and the preparation of required reports, While the present fee per student is $3, the Veterans Task Force study in- dicates that the average ëost for processing is $25,l9. It is quite evident from these statistics that there is a substantial discrepancy between the cost of certifying veterans and the amount the institutions are Teimbursed for the process. I believe that the recommendations made by the GAO support the Veterans Task Force contention that many schools are in need of PAGENO="0019" 2639 additional funds, I am, therefore, in full support of a pro- vision to increase reporting fees, In light of the present costs, I feel that a $7 to $12 increase would be most reason- able, I would hope that the Coemittee will give this matter its immediate attention and full consideration when the future reporting fee rate is determined, Sinc el ~Jo ,TUNMEY lJni d States Senator JVT/std PAGENO="0020" 2640 California State University, Chico Chico, California 95926 yeterans Affairs August 25, 1975 VETERANS' AFFAiRS COMM. Senator Vance Hartke, Chairman SEP 0 ~ 1975 Committee on Veterans' Affairs United States Senate ,ashington, IC. ~5l0 WASHINGTON, 0. C. 20z510 Dear Senator Hartke: I am referring to your letter to Mr. Ed Mendez, Director, Office of Veterans Affairs, at CSU, Sari Diego in which you discussed your awareness of the need to change the current reporcing fee received by educational institutions for certifying veterans and their dependents. I have no specific data on what it takes materially to certify a veteran student for the G.I. Bill, but have been dware that individual schools have acimowledged that it takes roughly $10 to $25 per person for certification. This would include staff salaries, computer programs, logistics support, supplies and materials, telephone utilization, and the like. I personally feel that these figures are somewhat out of line, hut that there is no question that the $3 and $4 that institutions presently receive is not adequate to meet the existing requirements. Daily it seems, the Veterans Administration adds new demands on the institutions for providing additional information and services relative to certification. All of these demands make it unusually difficult for us to operate within the parameters defined by the Veterans Administration and the Bureau of School Approvals. I therefore strongly urge that you and your colleagues address yourselves to the issue of the reporting fee and suggest that it should be somewhat in the neighborhood of $10 per veteran student per cextification. Our experience at CSU, Chico, indicates that with a veteran population of approximately 1,500 persons, generates roughly $5,000 from the Veterans Administration to certify these students. As a result, we mist employ one person on a full time basis to meet only the basic requirements as defined by the V.A. This means roughly $10,000 a year, and as you can see the $5,000 which we receive from the Veterans Administration only covers one half of the individual persons salary, not counting any other expenses associated with this process. The California State University and Colleges PAGENO="0021" 2641 Anything that can be done to ~grade this system will certainly your continued efforts ~ Directori\ Cc: Vetè~an Program Administrators of California Representatives PAGENO="0022" 2642 SAN DIEGO STATE UNIVERSITY SAN DIEGO CALIFORNIA 92115 Vete~ans Affai~s Office August 26, 1975 ~ ,-~ ~--.,.. - Senator Vance Hartke Chairman U.S. Senate Committee on Veterans Affairs Washington D.C. 20510 WASHINGTON D. C. 20510 Dear Chairman Hartke Your response to my letter, regarding the Veterans Admini- stration reporting fee to educational institutions for processing VA forms for veterans, was most heartening. It is reasuring to know that your committee is also con- cerned with the inadequacy of the current fee. I do plan to submit material in support of my conten- tion; however, I think it necessary first to have an under- standing of how the original and current fees were computed. With this understanding and/or formula my calculation, for processing all forms necessary to insure prompt payment of G.I. Bill benefits to student veterans, will be much more accurate. Many other institutions in California want to submit material to the committee; if we all work from the same formula, I believe the information will be more valid than if each institution computed its own cost analysis from its own formula. I trust my request is clear, should you require additional information please do not hesitate to contact me. Wishing you continued success with veterans legislation I remain, ~ncerely ~ /~ Edward R. Mendez Director Veterans Affairs Office EM: jb cc: Michael Keeton Chairman, San Diego County Veterans Task Force THE CALIFORNIA STATE UNIVERSITY AND COLLEGES PAGENO="0023" 2643 Cerr~tos CoHege 11110 as) A cr 8o e a d hors 1k CaIfo JOb 0 013) 8) 0 Seo~ng Abes~a, BeJIfIo~ae,, Cemlos, 0o~ooey, Hawaiiao Gaoiooo, Lakoa~ood, La Maada, N,aajo August 26, 1975 . VETER~'~~J~ SEP ~ The Honorable Vance Hartke U United States Senator and ~,j ~JL~n ~ ~ Committee on Veterans' Affairs \sklll4GTON tt Washington, D. C. 20510 Dear Senator Hartke: This letter is to support proposal of increasing school reporting fee from present $3 per veteran to approximately $15 per veteran. Cerritos College has found the cost this past year to be far in excess of the current $3 fee. Staff salaries for necessary school reporting exceeded $10 per veteran. In addition, supplies and auxiliary services connected with required reports brought total cost to between $13 and $14 per veteran. This year the Veterans' Administration has increased the required school reporting services which will add to the cost per veteran. Such services as certification of attendance cards, degree or seventy unit evaluations, checks for previous college credit, and evaluation of progress on a semester basis are now required. The Increase in fee Is Justifiable and should be supported by the Senate Veterans' Affairs Committee. Very truly yours, WlIfok Michael Superintendent-President WM:emn PAGENO="0024" 2644 i-u- MiraCosta College OCEANSIDE - CARLSBAD COMMUNITY COLLEGE DISTRICT Barnard Drive, Oceanside, Calif. 92054, Tel.(714) 757-2121 August 27, 1975 The Honorable Vance Hartke Chairman of the Committee on Veterans' Affairs The United States Senate Senate Office Building Washington, D.C. My dear Senator: Veterans and eligible dependents comprise more than one third of the total student population at MiraCosta College. They carry a "B" average in their academic work and represented 36 percent of the 1975 graduating class. While we recognize the contributions of the Veterans to our educational community, we are greatly concerned with the rising costs to the institution for certification and record keeping required by the Veterans Administration in order for these students to receive education benefits under Title 38. We are grateful to hear that the Senate Committee on Veterans' Affairs will open hearings soon on the Veterans Administration reporting fee and hope that the following information will be of assistance to the Committee. Under the provisions of 38 US Code, the Veterans Administration allows a reporting fee of $3 for each veteran enrolled as of October of each year -- $4 if that person was processed for advance payment -- to be paid to institutions certifying eligible students enrolled under Chapters 34 and 35. Increases in enrollment, added certification responsibilities, such as advance pay, end-of-term certification, and satisfactory progress determination and increased costs for personnel and equipment have caused the cost of reporting to the Veterans Administration to greatly exceed the reporting fee originally authorized by Congress. PAGENO="0025" 2645 While our veteran enrollment has tripled in the past two years, due to the success of the Veterans' Cost of Instruction (VCOI) Program, our certification staff has increased by only 50 percent from one to one and one half full-time staff. Increasing record keeping and reporting responsibilities imposed by the Veterans Administration and increasing veteran enrollment without corresponding increases in the VA reporting fee, may soon make certification and reporting of veteran status difficult. The result will be late and improper pay for the veteran. A recent analysis of the required certification and record keeping procedures at our campus, shows the cost of this work to be $13.01 per veteran per year. We hope your committee will favorably consider increasing the Veterans Administration reporting fee. Respectfully yours, Michael J. K eton Veterans Program Advisor MiraCosta College MJK:mj o PAGENO="0026" Mr. Michael J. Keeton Office of Veterans Affairs Mira Costa College One Barnard Drive Oceanside, California 92054 Dear Mr. Keeton, letter of May 6 and for sending the costs of certification for It is nost helpful for ne to have this information. It is expected that legislation to increase the reimbursement fee will be considered later this summer by the Committee on Veterans' Affairs as a part of a 1976 G.I. Bill education amendments package. You nay be sure that I will have your correspondence in nind at that time. Moreover, I have sent a copy of this letter and your letter and enclosure to Senator Hartke who is Chairman not only of the full Committee but of the Subcommittee on Readjustment, Education, and Employment. With best wishes, S~c rely4 /1/ Ii cc: Honorable Vance Hart~ke' ~A~1 ~ 2646 Mc~tc~ ,~encitc COMMITTEE ON VETERANS' AFFAIRS WASHINGTON. D.C. 20510 June 4, 1976 Thank you very much for your me a summary of the study on veteran-students. PAGENO="0027" 2647 Alan Cranston Sentor 815 E. Street San Diego, CA 92101 Dear Senator Cranston: Since the inception of the present GE Bill in 1966, the Veterans Administration has reimbursed colleges for the paperwork associated with the certification process by which schools provide the information to the Veterans Administration that that agency needs to pay students their educational assistance allowances. The three dollar figure that was.origtnally settled on was, to the best of the ability of those within the educational community to check, chosen arbitrarily. Several years ago, when the VA began providing advance payment checks to schools to distribute to veterans whose certification was submitted sufficiently far in advance of the semester in question to permit the preparation of such checks, the VA began paying a four dollar fee for each student so certified. At present, the majority of veterans are not certified for advance payment checks. Therefore, the rate at which schools are reimbursed is closer to the three dollar level. Furthermore, each year there have been increased demands placed upon the schools to counsel veterans, monitor their progress, and make the required reports to the VA. These demands have not only made more complicated the certification process, but have also necessitated schools hiring new counselors and academic evaluators. Therefore, adding to the obviously very high rate of inflation in the cost of administrative service over the past eight years, the VA has made even more costly the burden imposed on schools to assist their veteran students to receive their payments. At the moment, there is some indication that the advance payment program may end. The cost to the schools, however, would be only minimally affected, since little of the certification cost is associated with that program. In an effort to ascertain the true cost of providing these services, the San Diego County Veterans' Task Force commissioned the enclosed study by the Office of Planning and Evaluation of the San Diego Community College District. The team surveyed each of the ten public colleges and universities in San Diego PENNY BERGER GEORGE WESTON ED MENDEZ c~ CaJ~E~. Sowthwe~sEssyt CoLfege San Vce.2o SEa-ta a-t San VEago Uetty SYLVESTER LYON ANGELO CARL I CommurLEy Cottage PcJorna,s CoESege U I EGO C 0 U N T V VETERANS TASK FORCE May 6, 1976 MIKE KEETON OtJuzCc~Ea CoUege JOHN DIBBLE CkcacmorE CoUege PAGENO="0028" 2648 County to determine how much certification and related activities actually cost the schools. As you can see from the figures enclosed, the cost is $25.19, considerably above the three to four dollar amount schools receive. We hàpe that once you have seen this documentation you will consider asking your colleagues to assist us by raising the amount schools err to be reimbursed to a more realistic level. Sincerely, Michael 1 ecton Chairman San Dtego County Veterans' Task Force MJK:mjo Enclosure: Summary of the Survey PAGENO="0029" 2649 The Veterans Administration currently reimbursed the San Diego County public colleges and universities to allay the cost of certification paper work at a rate of $3.00 for veteran certification and $4.00 for advance payment certification. This research project establishes the true cost for * . certifying San Diego County Veterans. We surveyed the ten (10) San Diego county public institutions (viz, Grossmont College; Mira Costa College; Palomar College; San Diego City College; San Diego Evening College; San Diego Mesa College; San Diego Miracar College; San Diego State~ ~Uei~~rsity; Southwesterncollege; University of California, San Diego).. Employees directly involved with *the certification process at these institutions included both counselors~. and the secretarial-clerical staff. . _.The Federal Government provided factors to be Used inthecomputation of indirect costs (i.e. benefits and overhead) for employees involved in veteran certification. The median factor used in San Diego County. was 39% of the salary of the employee. . The indirect costs coupled with the direct costs (i.e. salary). gives the total compensation and overhead for employees. . . . During the 1975 calendar year, seventy-one (71) employees worked a total of 26OShours*per week ofwhich 1664.5 hourswere spent on~ veteran certification. Veteran certification therefore accounted for 64% of. . the employees time. Yearly compensation and overhead costs was $686,710.62. During 1975 the ten (10) San Diego County public colleges and univers5ties certified 27258 veterans and their dependents. The costs for certification of veterans averaged $25.19 per capita. ~The lowest rate at which a veteran was certified was $15.50. $45.58 was the highes~t rate for certification, in the county. The chart (see addendum) gives a breakdown by college and university. All figures are from the 1975 calendar year. PAGENO="0030" SCHOOL Number of employees in-' volved in cert{- Hours libation pro-i worked per cess. week hours worked per week on vat- eran aertif- icatiori % of tine spent or. certificat- Yoar~y coop- ensatbon overhead Number Vet- erans & De- pendents (~rr~ F-f~u1 Addendum Per Capita Cost ~rossmonr College 7 270 242 90% 104,673.00 4797 $21.82 Hira Costa College 11 - 300 170.5 78,254.00 1717 " $45.58 Palomar College 10 400 192 48% f_84, 629.00 3585 $23.60 San Diego City College * 9 . 360 207 58% 70,661.06 0 9600 ~` $31.10 San Diego Evening College * 10 . 390 . . 277 . . 71% 125,048.85 See Sen Diego City College . `$31.10 San Diego Mesa College 9 360 . . 210 ` . 58% . 61,884.56 Sec San, Diego City College $31.10 San Diego Miramar College 5 . 195 . . . . `102 . . , .. 52%. . . 40,987.15 See San . Diego City ` College ` $31.10 ~ `San Diego State University 5 . 120 120 . . 100% 60,888.00 3723. $16.35 Southwestern College . 3 130 , , 115 88% *, 52,759.00 3402 , ` $15.50 ~Jnivcrsity of California S.D. 2 . . . 80 . ` 28 . -~ . 35% . 6,926.00 434 $15.96 TOTAL ` 71 0 2605 . ` 1,664.5 ` . . 64% ` 686,710.62 27,258 $25.19 ; * Include entire San Di go Community ollege Distri~t Figuree (i.e , San Diego Ci y College, Se . Diego Evenin~ College, San Co lete San DIeg Miramar Call ge), Diego Mesa PAGENO="0031" 2651 Chairman HARTKE. The next witness is John 0. Eidson, vice chancel- lor of the University System of Georgia representing the American Association of State Colleges and Universities. STATEMENT OP DR. EOHN 0. EIDSON, VICE CHANCELLOR, UNIVERSITY SYSTEM OP GEORGIA Dr. EID50N. I am John 0. Eidson, vice chancellor, University Sys- tem of Georgia, speaking on behalf of the American Association of State Colleges and Universities (AASCU). These colleges enroll about one-fourth of all American college students, including a large proportion of the veterans now attending institutions of higher education. Our organization has already gone on record as supporting the continuation of the GI bill for members of the armed services. We do not agree with the decision of the House Committee on Veterans' Affairs to terminate these benefits for those entering the service after December 31, 1975. There are a number of reasons for our feeling. One is that the GI bill has always been seen by Congress as serving at least four different purposes, as defined in section 1651 of chapter 34 of the United States Code, which sets out the purpose of this program. Here is the wording of section 1651: The Congress of the United States hereby declares that the education pro- gram created by this chapter is for the purpose of (1) enhancing and making more attractive service in the Armed Forces of the United States, (2) extending the benefits of a higher education to qualified and deserving young persons who might not otherwise be able to afford such an education, (3) providing vocational readjustment and restoring lost educational opportunities to those service men and women whose careers have been interrupted or impeded by reason of active duty after January 31, 1955, and (4) aiding such persons in attaining the vocational and educational status which they might normally have aspired to and obtained had they not served their country. Several things should be noted about these four points. The first is that the GI bill is seen by Congress as serving several different na- tional purposes. One purpose is to provide readjustment benefits to those whose careers have been interrupted by service since Janu- ary 31, 1955. This is the traditional readjustment benefit. However, Congress also gave importance to the purpose of making services in the Armed Forces of the United States attractive, and to extending the benefits of a higher education to qualified and deserv- ing young persons who might not otherwise have that opportunity. On the first point, there is every reason to believe that the GI bill helps to attract a great many people to the services, especially people with ability and potential. There have been serious questions of whether the volunteer armed services, especially in times of prosper- ity, will become made up heavily of people of relatively low ability as well as low income. To attract high-quality people for the modern armed services, in the judgment of many people, requires extensive educational and training opportunity-which the GI bill now provides both for those in service and those who leave. This, we think, has to do with the quality of persons involved. PAGENO="0032" 2652 Several Defense Department studies indicate that 01 bill and edu- cation benefits are seen by a great many volunteers as a major reason for joining the military. The point about extending educational opportunity to many who otherwise would not have it is self-explanatory. Millions of Ameri- cans have benefited from the 01 bill programs since World War II. A great many were from lower-income or working-class back- grounds~ and otherwise would not have had this chance. Many leaders in every walk of American life have benefited from the 01 bill and in turn, had the chance to benefit America. Further, through in- creased earnings and higher taxes they have paid back the original GI bill costs several times over. I note this has not been mentioned 1)reviotislY. Chairman HARTKE. As aware as I am of it, do you know that there has been no mention of it in these hearings until you testified just now. So I compliment you for that. Dr. EIDs0N. There is one further point in section 1651 which is worth noting. Some who would end the 01 bill have said that it is a wartime program. However, the extension of benefits to those in service after January 31, 1955, often called the cold war 01 bill, is a clear recognition by Congress that the bill is not wartime alone and also that the country is in a more or less permanent cold war state which one Communist leader once called no peace, no war. Military duty in today's uncertain times must always mean the risks asso- ciated with a crisis such as the Mayaguez and Pueblo incidents, the Cuban missile crisis, the Berlin airlift, and other crisis which may not be technically war but are not exactly peace, either. It is our understanding that some who want to end the 01 bill believe that the Defense Department will somehow provide compara- ble benefits. But no plan has been put forth which would provide benefits even faintly comparable to the 01 provision of at least 36 months of full-time education with a payment of $270 a month, plus a dependency allowance. A great many men who leave the service will still need additional skills and training. Many will be married and have families, like many Vietnam veterans, and will not be in a position to attend college on a full-time or even a part-time basis, without 01 help. Many will leave after their first or second term of duty, ~nd many still will be untrained for civilian life, without this additional assistance. I would like to emphasize here the matter of us helping not only our military and defense, I think it helps to raise the quality there, having more education, a bigger percentage of the educated, but it also benefits society. It sees to it that someone who might not be able to get an education then could do so, and society, over and above the matter of its connec- tion to the military, would be helped. I think that that shows up in many ways in the 317 colleges and universities that are in our association, the American Association of State Colleges and Universities. For these and many other reasons, it is our belief in the American Association of State Colleges and Universities that the Congress PAGENO="0033" 2653 should not terminate one of the most successful and important pro- grams in American history. I really think that very few programs have proven more valuable than this one, and we hope that this program will be continued. I appreciate the opportunity to testify in this regard. Chairman HARTKE. Thank you, Dr. Eidson. I also want to point out that Senator Talmadge who is an extremely valuable member of this Committee had other appointments this morning and could not be here. We will certainly call the testimony to his attention. Senator STAFFORD. I have no questions, Mr. Chairman. Chairman HARTKE. Without objection, I order the following com- munication placed in the hearing record. 78-226 0-77 -3 (Pt.4) PAGENO="0034" 2654 [Subsequently, the following material from the Servicemen's Opportunity College of the American Association of State Colleges and Universities was submitted for the record:] Jason I ocu~ian of Sta:e Co!eqso and Univcrs:bce One Dupont Cirdo/Sute 7CC/Washington. D.C. 2C036 (202) 2937070 May 27, 1975 From: Jim Nickerson, Director, SOC Re: Note Comment re the Impact of an End to the G.I. Bill There are substantial data in reports of the VA, HEW, National Alliance of Businessmen, National League of Cities, US Conference of Mayors, camp others, showing various 0.1. * Bill iopatt factors. Data such as total payments to veterans by state, average per capita payment (also by state), use-rate * of the 0.1. Bill among eligible veterans,are readily available. Other studies reveal sharp inequities in the ability of mid- vostorn and eastern veterans to avail themselves of the Bill be- cause of a larger gap between the total cost of subsistence and schooling in these areas and the G.I. entitlement. For example, a-vet attending San Francisco State University has to spend only 19% of his yearly G.I. Bill benefits for education costs, while the vet at 59MW Ccllege at Buffalo a comoarabie institution, must spend 56% of his benefits. This is reflected in participation rates of 41.41 by California veterans in contrast to 23.2% in -New Ycrk in 1974. The dollar impact of the G.I. Bill on a local economy is mubstantial. For example, from IV 1968 thrcugh FYl974 the VA paid G.I. Bill benefits to California in excess cf 1.7 billion. In FY 1974 alone nearly $457 million want to California vats. If one applies a "multiplier factor" similar to that used for the tourist dollar (aeproximately 2.5), the impact upon Califor- nia's economy would approach $1.2 billion. (2.5 x $457 million) At a recent conference a representative of San Diego County estimated monthly 0.1.-Bill payments to vets within the county to be approximately $14 million per month or nearly $170 million per year. This would have a $425 million impact on the county's economy in a single year. Not reported in the phone poll of student aid officers con- ducted by the SOC office the week of May 19-23 is an estimate of impact on tot-el veteran enrollments in 2-year and 4-year colleges. In 1974 approximately 1.8 million veterans were enrolled in 2-year and 4-year institutions or 18% of thO 9.98 million in those in- /1)~ Itt ();L, ,-,tta~ PAGENO="0035" 2655 stitutions. If as reported by our phone respondents, 80-90% would not be in school were it not for the G.I.. Bill, enrollments would be decreased by approximately 1.5 million. This would seriously affect the programs most used by veterans, for staffing and support depends heavily upon enrollments in particular programs. The dollar impact on institutions is more difficult to assess.. Since budgets are based heavily upon anticipated number of students served, authorized expenditures will reflect the anticipated enroll- msnt reductions. For example, a loss of 100 student veterans in a 2-year college (average tuition is $287) would be reflected in a tuition loss of approximately $28,700. However, tuition in 2-year public colleges represents only about one fifth o.f the cost to the. state for the student's year of sáheoling. Thus, the total expen- diture authorization would be reduced approximately $150,000. (5 x $28,700) . . . These data are merely suggestive of the impact of an end to the G.I. Bill upon veterans, institutions, and communities, to say ~nothing of related social consequences partainin~ to an all-volunteer military service and loss of access to education for a substantial group of men and women. . . I hope these data and the two attached reports will be of interest and assistance to your office. . . ~ncerely,. .3 més F. Nickerson Director Soc PAGENO="0036" 2656 A sample poll of college and con~aunitY reaction to a probable end to the 6. I. Bill. by The Servlëernefl'S OpportunitY College MSCU AACJC One Dupont Circle washingtOn, D.C. 20036 Report of ~ phone poll of yeteranS~ pro~rarn ad~ninlstr~tOrS on 17 campUSeS, May 19 23, PAGENO="0037" 2657 The proclamation by President Ford and his request of the Congress to take action to end the C. I. Bill on Juhe 30 poses substantial prob- lems of adjustment for the military services, educational institutions, futoreveterans and the communities and states where they live and at- tend school. With the decision of the Congress two years ago to abolish the draft and rely on voluntary enlistment, the military services took steps to make the services more attractive. Educational opportunIty has become a lead- ing inducement for a: majority of recruits. However, the major share of educational entitlement and support has come more from the C. I. Bill than from educational assistance received while in service. Cooperative pro- grams between institutions and the services such as the Servicemen's Op.. .portunity College and Project AHEAD of the Army which seek to enhance program planning and orderly study opportunities: among institutions will find with the loss of the G.I. Bill increasing difficulty in encouraging institutions to adjust their procedures. Institutions can expect the proportion of veterans in school to shrink dramatically, perhaps from an average of 18 percent to possibly 2 - 3 percent of their total enrollments. This translates into a sharply reduced dollar flow through the veteran to institutions and corrrunities and will have significant economic impact upon college and city budgets, %and local business and industry. With no intent to argue the wisdom of a public policy decision of this magnitude at this time, the Servicemen's Opportunity College sought to assess the awareness of veterans, institutions and communities to the impact of an end to the G.I. Bill. SOC polled a series of college officials (veterans' program administrators) by telephone with questions probing the extenL of awareness, the level of discussions, possible action and more specifically, their estimates of the impact upon college, community and future veterans, if and when the G. I. Bill is ended. Fifteen representative institutions were. polled two weeks after President Ford's May 7 proclamation (Hay 19-23). The sample included eight two-year institutions and seven four-year; one was private and the rest were public institutions. (The poll actually began with seventeen schools, but two were completely unaware of the impending end of the C.1. Bill and so were not asked to respond further.) Respondents were read a brief statement as. follows: "On May 7, President ord asked Congre~s to take necessary action to end the C. I. Bill, perhaps as soon as July 1. Thus, enlistees after that date would receive no benefits. * . However, those now in. service or enlisting prior to July 1 would be eligible for benefits under the present law." Fifteen questions were asked of each veterans' administrative officer afld ~ was invited. The responses have been categorized and, where appropriate, illustrative statements were included. As an extension of the study, response to each item was invited relative to any selective impact on minorities. These data are reported separately. len ins ti tuti ens responded to these questions rel~itive to imj~act upon minori tibs. PAGENO="0038" reness of prob~ic~1o~. l:ere ~y~.aware of this prob- e action? the 17 student officers polled are una~:are of any action to end G.I. Bill. Therefore, in their a, no f~irther' questioning was in er and the sample was reduced to Are your veterans aware? How about your administration? Your faculty? Your student body? Is the community aware? ~ow about the local VF~1, American Legion, etc.? ;s~eper & media cove~g~ Has there been [any] coverage In your student newspaper? `Has there been comment or report in community newspaper(s) or other media? *~p~ article on1y~ THE FINDINGS Some Aware Awareness Unaware 15 n/a 2 minority answers on right Some Aware Awareness n/a n/a 5. 4. 3 .9. 2 11 .8 10 S 6 3 2 2 *5 2 3 8. 2 Yes ABIt 1 2 Unaware n/a 5 n/a n/a 8 8 6 None n/a 3 n/a n/a 2. 2 2 2 n/a n/a 0 0 None 12 7 2 .6*, Yes A Bit n/a n/a 2 0 8 PAGENO="0039" C. Public statements or prqposed action Yes No * Yes No 1. Are you aware of any actio?1 or proposed action or public statements a. by campus veterans b. by college or administration c. by any community group d. by VFN, American Legion, etc. D. Extent of toncern 1. How would you characterize the concern of: a. your vet~erans' group 2 b. the general campus 2 c. the community . `1 d. VFW, American Legion, etc.. . 2 E. About the veterans How would you judge the calibe1~ of your present veterans relative to the rest of the student body? Other: more stable, older, have better focus, serious, more visible as a group, etc. (Same characterisjtjcs listed for minority veterans.) 2. In what areas of study (or programs) Program do your veterans concentrate their work? List a few. . Business Voc/Tech Engineering Liberal Arts Law Enforcement~ 4 3 7 4 8 4 3 `4 1 14 0 15 1 14 0 15 Quite Mildly Indif- Concerned Concerned ferent 0 10 n/a n/a 1. 9 Unin- formed Mildly Indif- . Unin Concerned ferent form 9 Quite Concerned 2 2 n/a 6 2. 2 6 Average 3. * Better Than Average 12, 2 0 n/a 2 4 n/a 4 4 5 n/a Better Than. Average 2 ~J1 Average 6 Below No Average Informati 0 2 Below Average 0 Frequency of Hention 9 4 3 `3 .2 Frequency Program Hention Business 4 Voc/Tech 2 Liberal Arts 2 Social Sciences 2 Minority Studies * PAGENO="0040" 3. What propor tlon of your pre~erit veterans would discontinue if the 8.1. Bill were unavailable to thee? (On the minority survey, 1 school replied "would find other means' and I did not know.) Other co~ents Any other ccn~nents re the Impact of an end to the 8,1. 8111? Will need something in Its plate 10 Will hurt the institution 8 Certain programs will' suffer 6' Will be contrary to the good of the economy Will help retention In the military Will have little impact Will cause staff cutbacks Will kill PREP and special programs for vets 80%+ 50~8O% 9 5 1' 80%+ 50-80% 50%~ 5.. 2 1 5. 2 2 *1 PAGENO="0041" 2661 ~nma~y These data suggest that colieg~ and communities are largely unaware of any impending action to end the G. I. Bill. Only campus veterans and local service clubs appear to have been alerted, though not uniformly. Press/media coverage appears to have been linited: almost no coverage by the student press and largely limited to one article or newscast in the coramunity media. Virtually no actions, anticipated action or public statements by campuses or community groups appear to he in the making. by Much as was revealed/ohm WWII influx of veterans to the campus, the cur- rent veteran is performing above average, is better focused in his work and as a person, and isconsidered more stable. Current campus veterans choose programs with the better job prospects and perhaps more closely related to his military experience - business, vocational and technical training, enginee~'ing, law enforcement. - In the judgment oF the student veterans' offica administrators polled the C. 1. Bill was clearly the dominant factor in mhether the veteran could be in school. Fourteen of the fifteen respondento judged that from 50 - 95 percent would be unable to continua in school if the B. I. Bill was unavailable to them. In probing perceptions of the impact upon minority students or as reflected in awareness or possible action by minority groups, minority press, etc. there are few differences to be noted: slightly less awareness by minority groups; less attention in minority press outlets; almost no detectable action or an- ticipated action; and substantially greater indifference to consequences. Mi- nority veterans were considered to be no different from the average of the student body. Major study emphases ware quiteconsistent with all veterans, with heavy emphasis on business, vocational, technical and engineering programs. Minority studies was mentioned by only one rospondent as an area of major em- phasis for the campus veteran. An overwhelming majority-of minority veterans - would be unable to continue without the. B. I. Bill or an equivalent. PAGENO="0042" 2662 Chairman HAirricE. The next witness will be the Non Commissioned Officers Association of the United States of America. Mr. C. ~. "Mack" McKinney, director of legislative affairs. STATEMENT OF C. A. McKINNEY, DIRECTOR OF LEGISLATIVE AFFAIRS, NON COMMISSIONED OFFICERS ASSOCIATION OF THE UNITED STATES OF AMERICA Mr. McT(ixxrv. Mr. Chairman and distinguished members of the subcommittee: I am C. A. "Mack" McKinney. director of legislative affairs for the Non Commissioned Officers Association of the U.S.A. (NCOA), and a retired sergeant major, U.S. Marine Corps. The Non Commissioned Officers Association represents the largest group of active duty military enlisted personnel of all quasi-military organizations. Of a membership in excess of 150,000, nearly 85 percent aie currently serving as noncommissioned and petty officers in either the Army, Navy, Marine Corps, Air Force, or Coast Guard. In their behalf, the association is here today to oppose the bill, S. 1805, that would "amend title 38, United States Code, to set a terminal date for veterans' educational benefits under chapters 34 and 36 of such title, and for other purposes." Under the pioposed legislation, pe1so1~ entering the U.S. Armed Forces on or after July 1, 1975, would not be eligible for educational benefits, and those on active duty prior to that date and entitled to such benefits would have only until ~Jime 30, 1985, to utilize tl~eir entitlement. Recently. the House Veterans' Affairs Committee marked up a similar bill, H.R. 9576, which would extend the dates to December 31, 1975, and June 30, 1987, respectively. The NCOA also opposes this bill. In fact, if the NCOA had been in existence in 1946 and 1954, it would have strongly objected to terminating any and all GI benefits, particu- larly those dealing with education. However, what has happenel is not the issue before this distinguished panel today. What can happen is-and the NCOA hopes to do all within its power to influence this distinguished panel to see that educa- tional benefits are. neither terminated nor restricted for those serving on active duty now and in the future. Mr. Chairman, please permit me to say that the NCOA is acutely aware of this Nation's budgetary restrictions. Our president, Mr. James 0. Duncan, our international board of directors, our headquarters legislative committee, and our national capital office legislative staff are as concerned with Federal deficit spending as any American citizen. We, too, would like to see money saved whenever and wherever pos- sible, but we do not agree with President Ford when he states that his proposal, as contained in S. 1805, will "guard the Nation against unwarranted future. expenditures" amounting to "$1.5 billion over the next 5 years after termination." We do not deny that huge expenditures are involved in maintaining the status quo, but we do disagree that the funding is unwarranted. It is an investment in the future of America. Hon. John Paul Hammer- schmidt. Member of Congress, pointed this out last year when dis- cussing the Veterans' Education and Rehabilitation Amendments of 1974. Veterans using the GI bill return to the Federal treasury more PAGENO="0043" 2663 than the Nation invests in them to pay for the 36 months of college. (Congressional Record, February 19, 1974.) Surely the President, or this Congress, cannot continue to spend $6 billion a year for food stamps, then claim expenditures for educating our 01's are unwarranted. `We also disagree with the President's argument. that the United States is now in a peacetime climate. The NCOA submits that the Nation has not had 1 year free of conflict or a threat thereof since 1947. (Congressional Record, July 20, 1973, and World Almanac.) We have fought two wars since that year. We have lost tens of thousands of our young men, and we are still losing them all over the world. In fact, in approximately the same time frame, the Executive Office was preparing the letter and statement requesting the termination and limitation of 01 education benefits when the President ordered the Marines, Navy, and Air Force to retake the U~S.S. Mayagve2. (Docu- ment No. 94-151, U.S. House of Representatives, 94th Congress, first session.) Mr. Chairman, we lost some good men in that operation, and to- ward the middle of last month one noncommissioned officer and one petty officer were kidnaped in Ethiopia by rebel forces. (Washmgton Star, September 15, 1975.) Last week, both in West Germany and neai the El Toro Marine Corps Air Station, Calif., the military suffered the loss of 20 men in air crashes. (`Washington Star, September 27, 1975..) Meanwhile, according to one "special" U.S. Ambassador and certain high officials of our State Department, American servicemen are "sitting on a powder keg" defending the Panama Canal Zone. What do we say tothe 485,000 American troops stationed in foreign countries? Do we advise them that there is no threat to their safety? Do we say to them that being away from family and friends for 2 to 3 years is a tourist's dream? And how do we expiarn the continued ero- sion of military pay and benefits, particularly to approximately 200,000 enlisted military persons in Germany who are. subject to exorbitant automobile insurance premiums? (See annex "A" for premium costs.) Do we tell these dedicated men and women, many of them Vietnam veterans, that GI education benefits will be terminat~d before. many of them finish their careers in the military? And what do we say to the young man oi wom'tn w ho ~ `rnts to ~ olunteer for active duty for 3 or more years in order to take advantage of veterans education benefits? And last but cert'iiniy not least, is the question of the effect this bill, if enacted, will have on future. defense costs. Surveys conducted by the military indicate that a significant proportion of enlistees would not have ioined the sei ~ ices if there w `is no 01 bill `With the high costs of education `it the college le~ ci man'~ high school students turn to an enlistment in the Armed T~ oices `is `t me'ins to `t college degree If the way is b'ined by en'ictment of S 1805, oi similar hegisl'ttion, the qual ity of enlistees may drop significantly At the pm esent the military is i ecrmting a highei proportion of high school gr'idu'ites-ex'ictly w h~t Congress h'ts `isked them to do But that higher percentage w ill drop if 01 education benefits `ire tei min"tted Additionally ti `uning loss i `ites will rise `md mom e people will h't'ie to be reciuited Foi example if estim'tted training losses rise to `L percentage f'tctoi of 20 percent mste9d of 10 percent the military w ould ha~ e to reci nit `in `idditional 20 000 enhistees `i year (B'ised on PAGENO="0044" 2664 200,000 accessions, a conservative estimate.) At an estimated cost of $4,300 for each trainee loss, the services would have to spend an addi- tional $86 million per annum for replacement. This amount, by the way, does not take into consideration added training instructors costs and the costs to increase general educational development for more non-high-school graduate accessions. Total costs could run, conserva- t~veIy, $138 million. (Estimates obtained from data requested of the armed services.) And I repeat, this is an extremely conservative estimate. And we should not forget the costs that can be related to the replace- ment of existing and highly skilled military personnel who would leave the services early to take advantage of their 01 education bene- fits. The limitations of 10 years, or even 12 as in ILK 9576, is not suf- flcient to allow all Vietnam veterans presently in service to utilize these benefits. The average low cost of an adverse separation after training is nearly $17,000, and more for those with highly technical skills. For every 60 persons separating at this cost~ the military would lose more than $1 million. President Ford's statement referred also to the All-Volunteer Force. We gather from his remarks that lie assumes that the all-volunteer concept is working, and that the receipt of "high pay" justifies the termination and limitation of further educational benefits under the 01 bill. We cannot agree with this assertion. First of all, the all-volunteer concept has been tested only during a period of high unemployment; we must wait until the unemployment figures drop to normal before the concept can be. adjudicated. On August 1975 the Army's recruiting objective fell short as only 81.7 percent of its goal was attained. As for high pay, the NCOA does not argue the fact that the mili- tary is financially better off than it was some years ago. However, while others-Federal employees, postal workers, and civilians-are reaping increased gross pay and benefits, the military has been on the losing side for the past 3 years. Can you imagine that a service member can he the recipient of one promotion. four annual pay raises, and one in-service pay in- crease and perhaps gross less pay in 1976 than in 1973, or less pay in 1975 than in 1974 or 1973? (See annex B.) And the President * wants to further erode this member's benefits by terminating educa- tional benefits before that person has au opportunity to~ utilize the * entitlement. Mr. Chairman, the military-past, present, and future-has been the economic scapegoat of the past two administrations and the 93d Couigress. To date the combined actions of the two governmental bod1es have either reduced or terminated such items and programs as: Pay increases, project transition, enlisted personnel degree training, Armed Forces Institute, parachute jump pay, cost. of living allow- ances, permanent changes of stations, CHAMPUS and in-service medical care, special and proficiency pay, automatic reenlistment bonuses sp'ice a~ `ulable tra\ el reenlistment tr'i\ el payments accrued leave payments, and retired pay. (Rept. No. 93-662, U.S. House of Representatives, 93d Cong., 1st sess.: Rept No. 93-1225, U.S. House of Representatives, 93d Cong., 2d sess.; and HASC No. 93-49.) PAGENO="0045" 2665 In one action alone, the recoinputation to determine future military pay raises and retired pay (Public Law 93-419), the Federal Govern- ment estimates a savings of nearly $1.1 billion by 1980. (Rept. No. 93-1132, U.S. Senate., 93d Cong., 2d sess.) In another change in law dealing with reenlistment, bonuses, the estimated saving for a 6-year period was $44.5 million. (Rept. No. 93-857, U.S. House of Representatives, 93d Cong., 2d sess.) Other congressional actions mentioned earlier estimated savings of approximately $389 million in fiscal year 1974 and $688 irnihon in fiscal year 1975. Of these amounts over $35 million was a reduction in graduate schooling or terminal funds for degree-seeking training for enlisted military personnel. (A quick review of fiscal year 1974 and 1975 DOD appropriation bills.) These are but a few of the reasons why the NCOA believes that Congress should reject the President's request to terminate veterans' education benefits. These are the oniy "wartime entitlements" remain- ing for present and future military members as of May 7, 1975. On that date the President terminated all others. There is, of course, another reason-one we believe is a threat not only to Congress, but to the military. The threat is not posed by the NCOA or any veterans' or military organization, but by a union of Federal employees. That union is seriously contemplating unionizing the military forces. Should Congress continue to erode military pay, allowances, and benefits, and fail to listen to the petitions of the organizations now representing military personnel, it will join the administration in "adding fuel" to the union's rationale tha.t it is now time to organize the U.S. Armed Forces. The NCOA abhors the thought of military unions. It believes, the idea to be utterly ridiculous. But, gentlemen, it could happen. Mr. Chairman, may I make a few comments? Chairman HARTKE. You certainly can. Mr. MCKINNEY. Yesterday, testimony was received before this dis- tinguished panel from the American Legion and the National Associa- tion of Concerned Veterans, and each of their representatives made a statement that I believe needs to be clarified. In the case of the American Legion their spokesman noted that American youths enlisted in the Armed Forces during wartime for different reasons than they do during peacetime. This may have been the case in World War II and it may `have been the case in the Korean war. I had the opportunity if one prefers to call it that, of serving in the recruiting branch of the U.S. Marine Corps during a peacetime. period, 1960 to 1963 and again during a wartime period of 1969 to 1971. There was no difference in the reasons why these young men enlisted in either period except there was a motivating factor, the draft, in the 1969-1971 period; however. the majority of them did enlist `because of the training and educational benefits that were available. These. were surveys conducted at our recruiting station at the time the young man enlisted. In the case of the National Association of Concerned Veterans, their spokesman noted that certain military members may qualify for readjustment pay after serving 4, 10, 12. or 16 years. PAGENO="0046" 2666 Mr. Chairman, only commissioned officers and warrant officers, and certain Reserves, are entitled to readjustment or severance pay. Ap- proximately 86 percent of the total active forces or more than 1.9 million enlisted members received not one cent from this Government if they are honorably separated from the armed services to assist them in readjusting to civilian life. Mr. Chairman, you may recall that last year, at our request, you introduced legislation in the 93d Congress to correct this discriminate practice. Senator Thurmond, a nieinber of this panel, was one of your cosponsors. The fact that the regular enlisted member is not entitled to sever- ance or readjustment pay, we feel, under the present law, is certainly a sufficient reason to continue the GI bill. There is also one other additional item that I'd like to bring up and that is yesterday the House passed a defense appropriations bill, H.R. 9861. It completely terminates any cash settlements beyond the total of 60 days accrued leave for enlisted personnel. For years enlisted personnel were entitled to receive cash payments for unused leave whenever they completed an enlistment. Now that law has been limited by the House Committee on Appropriations with- out any public hearings. Here went another entitlement, along with the others, and we're talking about 86 percent of the military force who never got a chance to have his or her day in court to contest the action of this Committee that has no jurisdiction over military law. That privilege belongs to the Committee on Armed Services. Thank you very much, sir. Chairman HARTKE. That appropriation bill has not passed the Sen- ate yet, has it? Mr. MCKINNEY. No, sir; it has not. Chairman HARTKE. Is there still a good chance to put it in? Mr. MCKINNEY. I hope so, sir. Chairman HAlvrwE. All right, fine. Let's try that. Thank you. I appreciate both of those, Mac. As usual, you're right on the ball. Mr. MCKTNNEY. Thank you, sir. lAnnex A and B as submitted by Mr. C. A. McKinney follows:] ANNEX "A" Rates for U.E1. Forces auto liability insurance in Germany Rates for all Category automobiles Officers 25 or over and married DM 364 ($146) Civilians, E-8s, and E-9s 25 or over and married; Officers under 25 and married PM 514 ($206) Officers, civilians, E-8s and E-9s 25 or over and single PM 654 ($262) E-1 through E-7 25 or over and married PM 732 ($293) All civilians under 25; E-1 through E-7 under 25 and married__ PM 867 ($347) All E-1 through E-7 single PM 1184 ($474) Officers under 25 and single PM 1250 ($500) Sources: Fortune, Zurich and Alu. Average rates charged by the three companies for minimum liability coverage only are listed. Full coverage on a new car will roughly double the amount listed. The dollar-deutschemark exchange rate used throughout this Stars and Stripes series, "Insuring You Car in Europe," is 2.50 marks to the dollar. Exceptions to this rate have been made, of course, in references to the exchange rates of the past. PAGENO="0047" 2667 ANNEX B MAN ENLISTS JAN. 1, 1970, IN U.S. ARMY FOR 3 YR--REENLISTED JAN. 1, 1973, FOR 3 ADDITIONAL YEARS AND PROMOTED TO PAY GRADE E-5 UPON REENLISTMENT-IS A BACHELOR RESIDING AND EATING IN GOVERNMENT FACILITIES AND IS A VIETNAM COMBAT VETERAN Monthly 1-time payment Profi. Reenlist. Separa. Basic Parachute ciency Accrued ment tion Annual Dates pay pay pay leave 1 bonus 2 travel 3 receipts 4 1973: Jan. ito Dec. 3L 438.90 $55 $75 $387.00 $1,316.70 $60 $8, 590.50 Oct.i to Dec.31 ~i920 57.60 Total 8,648.10 1974: Jan. ito June 30 - 486.30 655 3,697.80 July ito Sept.30 486.30 1,683.90 Oct.ito Dec.31 513.00 775 1,764.00 Subtotal 7,145.70 (Oct. ito Dec. 31) 8(521.30) 24.90 Total (1,170.00) i975: Jan. ito Sept.30 5i3.00 4,617.00 Oct.ito Dec. 31 538.50 1,615.50 Subtotal 6,232.50 (Jan. ito Sept. 30).. 8 (521. 30) *74.70 (Oct. ito Dec.3i).:. 8(556.20) - - *53.10 Total (6,360.30) 1976 (Reenlists for another 3-yr term, 2d reenlistment): Jan. ito Sept.30 538.50 683.30 5,529.80 Oct. ito Dec.31 565.50 1,696.50 Subtotal 7,226.30 Difference * 559.50 18 60 *619.50 Total (7,845.80) (Jan. ito Sept. 30)., 8 (556.20) *159. 30 Difference *83. 70 (Oct. ito Dec. 31) 8(593.40) 8(577.20) 111770 Total (8,106.50) i day's basic pay for each day (30 percent) of accrued leave, plus 70c daily for subsistence. 2 mo's basic pay multiplied by number of years reenlisted for 1st reenlistment; 20 days' basic pay multiplied by number of years reenlisted for 2d reenlistment. - 3 6c per mile multiplied by number of miles (1,000)-distance between home of record or place of enlistment and place of discharge. 4 Taxes not included. Amount shown is gross pay. Actually received in 1974 due to President's "illegal" delay of Oct. i, 1973, pay raise by 3 mo. Parachute jump pay reduced by Congress; Public Law 93-238. 7 Proficiency pay terminated by Congress/Army Jan. 1, 1975; Public Law 93-238. Monthly basic pay if raise was computed under previous law. New law (Public Law 93-419) charged method of compu- tation. ES-S percent was equal to 7.2 percent; 5 percent is equal to about 6.7 percentj. 9 Congress instructed DOD to tighten up on payments of settlements for accrued leave. DOD issued new directive and submitted legislation to 94th Cong. to change system for enlisted personnel. 10 Payments terminated by Public Law 93-437. 11 Difference between new method and old method of computation. See 8 above. * Difference. Chairman HARTKE. The next witness is Mr. John A. Lancaster, the Administrative Assistant of Para'yzed Veterans of America. PAGENO="0048" 2~68 STATEMENT OP JOHN A. LANCASTER, ADMINISTRATIVE ASSISTANT, PARALYZED VETERANS OP AMERICA Mr. LANCASTER. It is my pleasure to respond to your invitation to comment on S. 969. The Paralyzed Veterans of America is in favor of extending to 45 months the basic educational benefits available to veter- ans under chapter 34 of title 38 and to their dependents under chapter 35. We hope that this Committee, along with the whole Senate, will not consider, as is presently being done in the House of Representa- tives, a simultaneous cessation of 01 bill benefits for our future veterans. The Paralyzed Veterans of America realize, better than any other veterans organization, the potential rehabilitation benefits of educa- tion. A great many of our nonservice connected members have turned to the 01 bill. following their injuries in order to make up with addi- tional training and education what they had lost in physical ability. The result has been that many of them have returned to our Nation's productive work force in spite of their injuries. The education benefits provided by the 01 bill have made it possi- ble for many individuals, who would not have been able to `afford it otherwise, to further their education whether it be academic or vocational. Historically, 01 education benefits were meant to assist veterans re- turning from wartime service. It has been argued that these benefits are peculiar to wartime service. However, for 32 of the past 35 years, in war and in peace, education benefits have been provided for all veter- ans. Congress felt strongly enough about the value of this program that, in 1966, they made 01 bill education benefits permanent, rather than terminating upon a Presidential proclamation that a war had ended. In section 1651 of title 38, United States Code. Congress declared that "the education program created by this chapter is for the purpose of (1) enhancing and making more attractive service in the Armed Forces of the United States * * ~ The facts indicate that the 01 educational program is one Govern- ment program that has worked in the past and is working now. Studies have showii that for every dollar spent on 01 educational benefits at least $4 is realized in additional tax revenue from increased earn- ings resulting from increased education and training, and there is no doubt that there are some savings in reduced unemployment compensa- tion paid out to veterans who have used these benefits. Partly due to our economic situation, minority and disadvantaged youths are enlisting in the armed services in disproportionate numbers. The 01 bill gives them a chance to improve their education upon dis- charge, thus increasing their productivity and life potential. Cancella- tion of this program will thus eliminate this opportunity for them. It will further eliminate educational opportunities for veterans who become catastrophically disabled following service. We urge. unrestricted entitlement of 45 months of educational bene- fits for Vietnam era veterans and veterans of this future. . We have heard a number of arguments from the administration in support of the program's elimination. One argument offered is that educational benefits should be the responsibility of the Department of PAGENO="0049" 2669 Defense rather than the Veterans' Administration. Other arguments offered are that these benefits are too expensive and encourage service- men to leave the military. These arguments bear further examination. The program does in- volve significant costs although such costs will be considerably reduced in the future: The number discharged annually will be substantially less than the number released from the service during the peak years of the Vietnam conflict. Perhaps the Department of Defense should bear the cost of the program. However, there has been no serious dis- cussion of these important issues. No alternative proposal is pending before Congress, nor has the administration made any formal recom- mendations in this respect. Consequently, we believe it would be precipitous to terminate the existing program prior to developing an alternative program, whatever that program may be. Thus, we hope your Committee will not consider what the House is going to consider Monday. The argument that VA educational benefits encourage. people to leave the service ignores the reality that there will always be a certain turnover in the lower ranks where personnel are needed in large num- bers than career military who advance in rank over the years. Thus, the real question is what will be the composition of those in the lower ranks? If we wish a representative Armed Forces which includes those who score relatively high on aptitude. tests, then we believe educational benefits will be needed for them as recruitment incentive. Further, the current depressed state of the economy should not de- ceive us as to the importance of GI bill benefits. A recent survey con- ducted by the Army Testing Service last September revealed that one out of every four individuals tested indicated that they would not have enlisted if CT educational benefits had not been available. When servicemen were asked to list the three most important rea- sons for their joining the military, one out of every two listed post- service educational benefits. We applaud the extension of GI educational benefits to from 36 to 45 months and hope that you will not consider any future termination of those benefits. Mr. Chairman, I would like to comment on one aspect of our testi- mony and that is the rehabilitation benefits of `the GI bill. I not only. speak for members of our organization who, following service possibly came upon a catastrophic disability, and then they looked, in turn, to~ whatever rehabilitation they could get, to find out that the GI bill was the best thing going, and they generally ran with it because many states' "rehab" programs just are not nearly as adequate or as good as the GI bill benefits. There is also a rehabilita.tion benefit and readjustment benefit for those who have no disability following service, just from the mere fact' that, we would contend and I think you would agree, there is a certain amount of culture shock and a certain amount of rehabilitation needed when one leaves the military and goes back into civilian life. I do not think that the modern Army has changed that significantly, and I know, indeed, the Marine Corps and the Navy have not. They are not so close to being a civilian type. organization that there is not some readjustment that needs to be taken into consideration. 78-226 O-77-4(Pt.4) PAGENO="0050" 26~O We think these educational benefits provided by the GI bill are one of the things that can do that. Chairman HARTKE. You put your finger on something which has concerned me for quite some time. What you're really dealing with here is the psychological and sociological effect of military service. I appreciate you bringing that to our attention again. I might point out, to put it a little differently that there is a problem for infantrymen, for example, to find corresponding work activity in civilian life; isn't there? Mr. LANCASTER. Yes, indeed, there is. Chairman HARTKE. As I said, about the only thing you might even classify in this day and age as available could be an urban guerrilla. I don't mean to be disrespectful to the military. The military service is there in case of an emergency to do some rather disagreeable work. Mr. LANCASTER. That's very true, Senator. Possibly, he could work for the Mafia, too. Chairman HARTKE. I don't want to train him for either one of those. Mr. LANCASTER. The point is well taken. What is the average Marine, or the average infantryman in the Army, or even your normal deck- hand, say, in the Navy, what is he actually trained for? Chairman HARTKE. Swab down the cafeteria. Thank you John for a fine statement. We appreciate it very much. Mr. LANCASTER. Thank you. Chairman HARTKE. The last witness scheduled for this morning is Mr. Richard Shaffner, Assistant Division Chief of the Division of Programs to Advance Veterans Education, from the Bureau of Equal Opportunity, the Pennsylvania Department of Education. STATEMENT OP RICHARD SHAPPNER, ASSISTANT DIVISION CHIEP, DIVISION OP PROGRAMS TO ADVANCE VETERANS EDUCATION, BUREAU OP EQUAL OPPORTUNITY, PENNSYLVANIA DEPART- MENT OP EDUCATION Mr. SHAFFNER. Good morning, sir. Mr. Chairman, members of the Committee, and distinguished guests, I want to thank you for affording me this opportunity to address your group and present justification for continuation of the GI bill. My name is Richard Shaffner, Assistant Division Chief, Division of Programs to Advance Veterans Education, Bureau of Equal Op- portunity, Pennsylvania Department of Education. There has never been a scholarship program that has benefited so many and returned at least $6 for every dollar initially invested. Never, has one program reached out and afforded so many an oppor- tunity to pursue educational and training objectives, as the GI bill. Our educational institutions have expanded and grown to their pres- ent size, in part, due toOl bill dollars that accompanied the increasing numbers of World War II veterans who pursued postsecondary in- stitutional training after the war. This one piece of legislation has greatly shaped our country's con- tinuing role in providing world leadership. If we are to remain in our present position and continue to serve as an example for others we must preserve those ideals which we hold dear to us. PAGENO="0051" 2671 I encourage each Member of Congress to consider several factors before terminating one of this country's most benevolent laws ever to be enacted. Groups that will be affected, should the GI bill be ter- minated, include: (1) All infantry-related military personnel, (2) large numbers of minority persons, and (3) disabled veterans. Other factors to be considered are as follows: (1) Definition and purpose of the GI bill, (2) alternative program, (3) investment and return, in terms of dollars, and (4) developing a GI bill that is perma- nent to provide needed educational and vocational opportunities for all veterans. Our servicemen and women deserve the opportunity to continue their educational and occupational training beyond the time afforded during their military service. Many military occupational specialities require additional off-hours training and permit little or no free time for service persons to pursue educational or training programs prepar- ing them for civilian occupations. For example, one-half of the blacks and one-third of the whites separating from the armed services in 1970 were in military occupations not readily transferable to civilian life. What happens to the service person who has come from n low socio- economic class upon entry into the armed service, and upon separation or discharge can't find gainful civilian employment because his mili- tary training is not transferable to a civilian related occupatiOn? This person can't begin to identify sufficient financial resources to finance an educational or training program to acquire the necessary skills to become a productive member of society. Also, more and more minorities are entering the armed services, for various reasons. `What place in society can they expect to attain if upon reentry into the civilian job market they have no transferable skills? Certainly, w-e can't assume that every military person will make a career of the Armed Forces. Therefore, an alternative must be avail- able to `iccommod'tte those persons needing addition'il education or training to make the transition from military to civilian life. In the Army 25.1 percent of enlisted personnel are "ground-èom- bat", and 28.8 percent in the Marine Corps. Myself, having been in the infantry in the Marines, have had no chance to pursue an educa- tional program because of time constraints, field maneuvers, over- night bivouacs, training, et cetera. `When I had applied for an educational program I was denied access because it interfered with infantry training. Also, service-connected disabled veterans will continue to reenter the civilian job market. Hazardous types of military occupations will result in veterans being discharged due to their on-the-job accidents. Just because we tire no longer engaged in a war does not eliminate the number of disabled vets who will reenter civilian life. These veter- ans deserve education~al and vocational training opportunities to over- come their disabilities in order to become productive members of society. State bureau's of vocational rehabilitation should not be held ac- countable for providing these veterans with trainingand readjustment programs. Clearly, the Veteran's Administration's vocational rehabili- tation program should be the program addressing the needs and services for these veterans. PAGENO="0052" 2672 It is imperative that we define the purpose and intent of the 01 bill. Title 38, U.S.C., chapter 34, Veterans' Educational Assistance, Subchapter I-Purpose-Definition, section 1651. Purpose, states the following: The Congress of the United States hereby declares that the education program created l)y this chapter is for the purpose of (1) enhancing and making more attractive service in the Armed Forces of the United States, (2) extending the benefits of a higher education to qualified and deserving young persons who might not otherwise be able to afford such an education, (3) providing vocational readjustment and restoring lost educational opportunities to those servicemen and women whose careers have been interrupted or impeded by reason of active duty after January 31, 1955, and (4) aiding such persons in attaining the voea- tional and educational status which they might normally have aspired to and obtained had they not served their country. As the purpose in fact has indicated, the 01 bill is to provide edu- cational and vocational opportunities to veterans, along with enhanc- ing and making more attractive service in the Armed Forces. There- fore, one can't generalize and specifically say that the 01 bill is only for readjustment purposes. Whether we are involved in wartime or peacetime activities veterans should be afforded readjustment benefits. Alternative plans that would have the equivalent impact as the 01 bill have not been introduced or proposed. It has been stated that the Department of Defense will develop a program that would be similar to the 01 bill. I don't see such a commitment becoming a reality or having the impact and reaching as many persons as have benefited from the current and previous 01 bills. Also, I am concerned about DOD's involvement and commitment once a service person has been separated or discharged. In terms of investment, no program has returned as much from its original dollar investment. The 01 bill has been a blue chip invest- ment: Our Government has received back in additional tax dollars at least $6 and perhaps more for each dollar spent on 01 bill training. In addition, by the time the World War II GI bill ended, America had been given over 450,000 engineers; 180,000 doctors, dentists, and nurses; 360,000 teachers; 150,000 scientists; 107,000 lawyers; 243,000 accountants; 36,000 ministers; 280,000 metalworkers; 138,000 elec- tricians; 83,000 policemen and firemen; 700,000 businessmen, and over 17,000 writers and journalists, not to mention the educational oppor- tunities afforded many of our senators and representatives. Since the GI bill's track record speaks for itself, why is there such opposition to continue a program that has benefited so many and with the potential to serve so many more Americans? There is just no logic in repealing a program that has demonstrated nothing less than success since its enactment. Many programs exist that have not and are not fulfilling their goals and expectations. These are indeed the programs we should be focusing in on to see whether they merit continuation or should be canceled. In support of my position allow me to read the following excerpt from Mr. Olson's book, titled: "The GI Bill, the Veterans and the Colleges": To support their calls for a third GI bill The American Legion, congressional leaders, the Veterans' Administration and other organizations repeatedly cited the success of World War II and Korean bills. The AFI~-CIO, for example, re- minded the House Committee on Veterans' Affairs that the first two bills increased "the standard of living of the veterans and their families," raised PAGENO="0053" 2673 `~the levels of education and skills of the Nation." and proved "an exceptionally wise investment." Senator Ralph Yarborough, Texas Democrat, who led the unsuccessful campaign for a Cold War 01 bill and then worked for the Vietnam GI bill, called the World War 11 Act, "one of the most beneficial, far-reaching programs ever instituted in American life." Like the AFL-CIO, Yarborougli pointed out that the veterans Who utilized the 01 bill paid higher taxes than nonveterans or veterans who failed to use the benefits. The larger tax Payments, Yarborough reasoned, more than repaid what the program cost. In 1965 Cyril F. Brickfielcl, the Veterans' Administration's Deputy Administrator of Veteran& Affairs, publicly agreed. He published an article reporting the Veteran's Admin- istration's conclusions that the GI bill already had repaid its initial cost, and that the GI bill, "was one of the most successful pieces of legislation ever enacted." Another aspect that merits consideration is to enact legislation to continue the GI bill as a permanent educational and training pro- gram. This is not just a wartime. program as pointed out in the purpose of the Gi bill. Home loans began as wartime benefits but this program has been transformed into a near permanent home loan program. Education and training are essential ingredients in one's life. Without these attributes one would have limited choices to make in considering a career occupation. This would also put constraints on purchasing power in using the home loan program to its best advantage. I have upheld a philosophy regarding specific program evaluation and impact, that is, "everyone has the opportunity and freedom to criticize and speak his or her piece be it regarding a program or whatever, but before condoning the system, be able to offer an alternative that could produce at least equivalent results. I believe there hasn't been an alternative offered that could reach and positively affect as many lives as the GI bill has done for so many Americans." In closing, I would like to leave you with two important issues for consideration. First, Senator Hartke introduced S. 969 on March 5, 1975. which would greatly assist many of our veterans. This bill pro- vides for extending the additional 9 months of educational assistance from 36 to 45 months to include graduate study. Due to the high unemployment figures for Vietnam veterans, espe- cially minority veterans, this bill, if passed, will allow veterans to continue their education and training during a period when our cur- rent economic situation is resulting in an increasing number of layoffs and cutbacks in personnel in many occupations. Many veterans would benefits from this timely legislation. Many currently unemployed veterans could take advantage of continuing their education and obtain gainfuT employment once our economic difficulties are resolved and we achieve economic stability. Second, we are approaching our country's bicentenniaT celebration. Our strengths as a country, in part, are due to the many sacrifices made by our servicemen and w-omen and our veterans. Will we begin our celebration by express1ng our gratitude toward service personc~ by eliminating their opportunities to achieve an education that they could not otherwise afford? - The GI bill is as patriotic as mom's homemade apple pie and has been a way of showing our veterans a deep appreciation for their serv- ice, and that they, indeed, deserve, the best opportunities our country has to offer them. Thank you. PAGENO="0054" 2674 Chairman HARTKE. I want to thank you for your testimony this morning. It's been very helpful, as usual. [With objection, I order the following report placed in the hearing record.] [Subsequently, the following material concerning veteran-inmates in Pennsylvania was submitted for the record:] PAGENO="0055" 2675 CHARACTERISTICS AND NEEDS OF VETERAN-INMATES IN PENNSYLVANIA STATE CORRECTIONAL INSTITUTIONS Darryl Kehrer Dr. Sitansu Mittra Chief Chief Division of Programs to Advance Systems and Operations Research Veterans Education (PAVE) Bureau of Correction Office of Equal Opportunity Pennsylvania Department of Justice Pennsylvania Department of Education May 30, 1975 PAGENO="0056" 2676 SUMMARY The purpose of the study is to determine characteristics and needs of veteran-inmates in Pennsylvania state correctional institutions. The conclusions derived from the study follow: 1. Approximately 25~ or 1521 inmates incarcerated in 8 state prisons are veterans. 2. Approximately 4.8~ of veteran-inmates received a dishonorable discharge from the military service. 3. Approximately 26.8?«= of veteran-inmates received an undesirable, bad conduct, or dishonorable dis- charge from the military service. 4. Approximately 6l?~ of veteran-inmates served in the Army. 5. Average months of active duty of veteran-inmates was 33.2. 6. Average length of minimum sentence of veteran- inmates is 4 years. 7. Average age of veteran-inmates is 33.6 years. 8. Average grade level of education of veteran-inmates is 10.7 years. 9. Fifty-two per cent of veteran-inmates are black. 10. on the average 64~ of veteran-inmates had no prior offense, l4~ had 1 prior offense, and 22~ had 2 prior offenses or more. 11. On the average burglary and robbery are the most PAGENO="0057" 2677 predominant offenses of veteran-inmates. 12. Fifty-two per cent of veteran-inmates are Vietnam era; 20% are post-Korean but pre-Vietnam era; 10% are Korean era; 10% are post WWII but pre-Korean era, or not separated from military service, or information is not available; 8% are WWII veterans. 13. Fifty per cent of veteran-inmates are eligible for Vietnam era GI Bill educational benefits; 21% are ineligible for educational benefits because of a less-than-general discharge; 8% are ineligible for educational benefits because they are WWII veterans; 7% are ineligible for educational benefits because they are not separated from the military service or are temporarily considered ineligible because dis- charge information is not available; 6% are ineligible for educational benefits because they are Korean conflict veterans; 6% are ineligible for educational benefits because they have served less than 181 days active duty; 2% are ineligible for educational bene- fits because they are post-WWII but pre-Korean con- flict veterans. 14. Veteran-inmates assessed their needs revealing that institutional skill training was most prevalent; the second next most prevalent need was securing post-release state or federal grants or loans for education; the third most prevalent need was using PAGENO="0058" 2678 GI Bill benefits while incarcerated. RECOMMENDATIONS Based upon experiences gained in conducting this study, recommendations are offered in the form of supporting the detailed inter-agency chronology written by PAVE in September, 1974 and amended in February, 1975. This chronology indicates the importance of utilizing educational and vocational programs as well as the CI Bill in veteran-inmate prescriptive planning. It also indicates the importance of benefits counseling. Several goals of the chronology have already been completed. The entire chronology follows on pages four through seven. PAGENO="0059" 2679 CHRONOLOGY SEPTEMBER 1974 - SEPTEMBER 1975 ~2~L 9/74 1.1.1 A video tape outlining benefits and services to veterans in the Commonwealth has been produced and is available for Bureau of Correction staff training. 9/74-continuous 1.6.1 State Correctional Institution (SCI) education and treatment staff, probation and parole persons, community treatment staff etc. receive periodic resource information via PAVE information clear- inghouse. 9/74-continuous 2.9.1 Recommendations reference educational financial aid opportunities for veteran ex-offenders have been made to the Commissioner, ONE, as needed. 12/74 1.2.1 General advice has been received from Veterans Administration (VA), Depart- ment of Military Affairs-Bureau of Veterans Services (DMA-BVS), etc. ref- erence their roles in assisting incar- cerated veterans. 1/75 1.1.2 Veterans education/benefits information sessions have been held for treatment staff at each state correctional insti- tution; resource material has been provided; procedures in which Pa. Dept. of Education (PDE), DMA-BVS, VA can assist incarcerated veterans are out- lined. 1.3.1 Multi-agency benefits information sessions have been provided to incar- cerated veterans at each SCI; a needs assessment has been completed by each vet who attends; after-action reports have been written. 1.3.2 DMA-BVS has provided discharge review information to vets with other than honorable discharges. 2/75 2.2.1 A memorandum of agreement outlining PAVE and DMA-BVS responsibilities in PAGENO="0060" 2680 SCI's has been signed and implemented. 3/75 1.3.3 personalized follow-up interviews have been conducted with each veteran at each SCI; DMA-BVS, VA, PAVE, and 5Cr-educa- tion officers participate; after-action reports have been requested from partici- pating agencies. 1.3.4 Continuous inmate counseling has been completed by DMA-BVS and VA; individual inmate caseworkers have been advised of services rendered for case file. 1.8.1 Guidelines and proposal formats for having prison GED, voc-eci, and other programs approved for veterans training (preferably on a or full-time basis) have been provided to each SCI; assis- tance is provided as necessary. 4/75 1.4.1 VA has been requested to provide assis- tance to incarcerated veterans who have drug/alcohol problems, service connected physical or psychological disabilities or who need diagnostic testing. 1.7.1 On a continuous basis, the Bureau of Correction maintains listiflgs of vet- erans and appropriate data. 1.8.2 Proposals have been submitted to state approving agency. 1.9.1 Provisions have been made by SCI's to hold GI Bill payments in inmates' accounts. 2.0.1 Action has been taken to insure that inmates already enrolled in college level programs have been certified for educational payments. Certification assistance has been requested from VA, DMA-BVS, and SCI's as needed. 2.8.1 Recommendations have been provided to PDE, Correction Education, reference placing inmate apprentice tradesmen in jobs via the proposed inmate placement program. 3.2.1 Coordination has been maximized between Act 101, Veterans Preparatory, and other PAGENO="0061" 2681 programs so that SCI's may recommend such programs to veteran-inmates as post-release resources. 5/75 1.2.2 Correction education subcommittee to PAVE Advisory Committee has been estab- lished. 1.5.1 The inmate veteran counseling aide pro- gram has been initiated with trained counselors at participating institutions; "tie-ins" have been made with the pars- teacher program. 1.8.3 Approved proposals have been submitted to the VA by the state approving agency. 1.8.4 VA has approved programs; prisons have been advised of approval (or disapproval). 1.8.5 VA and DMA-BVS-have been requested to assist in certifying inmate student- veterans for educational benefits. 1.9.1 The Bureau of Correction has been asked to encourage single inmates to save (71 Bill funds for post-release purposes and married inmates (while incarcerated) to provide some funds to their dependents. 2.1.1 Guidelinss for using the (71 Bill in inmate prescriptive planning have been provided to the Bureau of Correction for implementation; PAVE monitors this process. 3.1.1 A report has been provided to. the Chief, Correction Education, PDE, reference initiating skill training to incarcera- ted veterans via P~. Assn. of Private School Administrators and the (71 Bill. 6/75 2.3.1 A (71 Bill educational pre-release guide has been written and provided to SCI's and DMA-BvS for implementation. 2.4.1 A (71 Bill educational parole guide has been written and provided to SCI's, Board of Parole, and DMA-BVS for imple- mentation; PAVE monitors this process. 2.6.1 Per regional need, the station house intercept concept has been implemented by the DMA-BVS, PAGENO="0062" 2682 6/75 3.0.1 A plan to assist veterans on probation has been developed by PAVE, DMA-BVS, and VA. 7/75 2.5.1 An inmates handbook on veterans bene- fits and programs for ex-offenders has been developed and provided to Sd's for distribution. 9/75 2.7.1 Evidence has been received that the number of incarcerated veterans using the GI Bill for ABE, GED, voc-ed, and college level programs has increased significantly;a report has been issued. 2.7.2 Evidence has been received that the number of incarcerated veterans using educational pre-release and educational parole plans has increased significantly; a report has been issued. PAGENO="0063" 2683 Characteristics and Needs of Veteran-Inmates in Pennsylvania State Correctional Institutions 1. WHO ARE THE VETERANS Late in 1974 the Pennsylvania Bureau of Correction started mobil- izing its efforts to gather necessary information on veterans among inmates of the eight state correctional institutions. The purpose was to identify veterans and inform them primarily of GI Bill educational benefits as well as other federal and state benefits which could be useful to them. This effort was made in conjunction with Pennsylvania Department of Education, Office of Equal Opportunity, Division of Programs to Advance Veterans Education (PAVE). 2. HISTORY AND MISSION OF PAVE InOctober, 1971, Governor Milton J. Shapp hired ten Vietnam-era veterans to work regionally with postsecondary educational institutions and various agencies to motivate and assist veterans in furthering their education and training. At that time only 13.5 per cent of Pennsylvania Vietnam-era veterans were enrolled in college level programs. PAVE developed on-campus advocacy services and out-reach programs. During 1973, 5,068 young veterans received assistance via a network of 53 college counseling centers. By mid-1974 the veterans cost of instruction, state veteran action center, and VA man-on-campus programs were initiated to meet veterans needs. PAVE was fortunate enough to assist veterans for a two to three year period prior to government agencies provision of comprehensive services per their mandate. PAVE redefined its mission in July of 1974 to include the follow- ing priorities: PAGENO="0064" 2684 (1) Improve educational opportunities and advocacy ser- vices for veterans incarcerated in state Correctional institutions. (2) Develop veterans remedial and preparatory programs regionally on college campuses. (3) Improve opportunities for educationally and econom- ically deficient veterans. (4) Improve educational opportunities for wheelchair- bound veterans. (5) Explore methods for granting credit for life exper- iences. 3. JOINT EFFORT OF PAVE AND CORRECTION Secretary of Education John C. Pittenger and Commissioner of Correction Stewart Werner signed a memorandum of agreement on July 1, 1974 which gave the Department of Education primary responsibility for administer- ing educational programs in state correctional institutions. Late in 1974, Pennsylvania Bureau of Correction joined with PAVE to design a course of action for assisting veteran-inmates. After some initial discussion, the following plan was adopted: During budget year 1974-75 PAVE agreed to be responsible for the development, improvement, and expansion of educational opportunities and services for veteran-inmates in the eight state correctional institutions. PAVE also agreed to seek assistance from state and federal agencies and write a chronology of service. During November and December 1974 steps were taken to identify incarcerated veterans in the eight statà correctional institutions. The PAGENO="0065" 2685 following data elements were gathered on each veteran-inmate: (1) Name (2) Bureau of Correction number (3) Armed Forces Service Number (4). Branch of Service (5) Months of active duty (6) Date of separation from active duty (7) Type of discharge (8) Type of offense committed (9) Minimum Sentence (10) Date of expiration of minimum sentence (11) Age (12) Educational level i.e., last grade completed before incarceration, or Wide Range Aptitude Test reading level, or Stanford Achievement Test. (13) Race (14) Prior offense committed 4. SERVICES RENDERED BY BUREAU OF VETERANS SERVICES AND VETERANS ADMINISTRATiON The Department of Military Affairs, Bureau of Veterans Services, agreed to be respohsib.ze for providing benefits counseling and advisory ser- vices to veteran-inmates and ex-offenders. The Bureau participated in initial group benefits briefings and needs assessment sessions. The Bureau also a- greed to initiate the following: (1) An early identification program in which inmates would receive GI Bill and other information at the 78-226 0-77 -5 (Pt.4) PAGENO="0066" 2686 diagnostic and classification point. GI Bill would be used in prescriptive planning as various educa- tional programs were approved for veterans training by the Department of Education. (2) Assistance in making application to upgrade other- than-honorable discharges. (3) Visit each prison at least bi-weekly. The Veterans Administration offices in Pittsburgh and Philadelphia agreed to participate in initial group benefits briefings and needs assess- ment sessions. They also agreed to initiate the following: (1) Follow-up assistance for inmates. (2) Guidance with regard to VA laws and regulations and how they affect benefits for incarcerated veterans. (3) Visit each prison at least twice each year; visit the Pittsburgh Institution more often, as needed. 5. STATISTICAL ANALYSIS OF VETERANS' DATA The data collection process took nearly six weeks to complete. Since most of the data were not available in the computer files, they had to be gathered manually. Some general facts are stated below pertaining to these data àlements. As of December 31, 1974, there were 1,521 veterans among a total of 6,039 inmates in the eight state correctional institutions. This indicates that approximately 25 per cent of inmates are veterans. The actual breakdown by institutions follows: PAGENO="0067" 2687 TABLE 1 VETERAN INMATE POPULATION INSTITUTION POPULATION VETERANS PERCENTAGE Camp Hill 895 83 9 Dallas 745 143 16 Graterford 1570 384 24 Greensburg 179 55 30 Huntingdon 822 254 30 Muncy 173 13 7 Pittsburgh 879 285 32 Rockview 776 304 39 Camp Hill and Muncy have remarkably low percentages of veterans because the former institution has a large percentage of juveniles and the latter is for women. Due to the nature of the security classification and the offender type for any institution, the incarcerated population at Muncy could be regarded as somewhat unique. Accordingly, the data collected on the 1,521 veterans was taken as a basis for stratified random sampling with proportional allocation. A flat 2O~ sample of the veteran population was chosen from each institution and estimates were made for the following: (1) Percentage of dishonorable discharges (2) Percentage of bad conduct, dishonorable and unde- sirable discharges (3) Percentage of veterans who served in the Army (4) Average number of months in active duty (5) Average length of minimum sentence (6) Average age group PAGENO="0068" 2688 (7) Average grade level of education (8) Percentage of blacks (9) Number of prior offenses committed (10) Breakdown of the offense types The statistical results are incorporated in tables 2 through 11. All results are based on a 99~ confidence level. A l00~ sample was taken from each institution to gain information on the following: (1) Breakdown of military service by war eta (See Table 12) (2) Eligibility/non eligibility for CI Bill educational benefits in prescriptive planning (See Table 13) TABLE 2: DISHONORABLE DISCHARGE PERCENTAGE OF DISHONORABLE ERROR OF INSTITUTION DISCHARGE ESTIMATE Camp Hill 0 0 Dallas 8.0 .13 Graterford 3.9 .05 Greensburg 0 0 Huntingdon 4.0 .05 Muncy 0 0 Pittsburgh 3.5 .06 Rockview 1.7 .04 Entire Bureau Population 4.8 .22 Six Institutions (Except Camp Hill and Nuncy) 3.1 0 PAGENO="0069" 2689 TABLE 3: BAD CONDUCT, DISHONORABLE AND UNDESIRABLE DISCHARGE (BCD, DD, UD) PERCENTAGE OF BCD, ERROR OF INSTITUTION DD AND UD ESTIMATE Camp Hill 44 .33 Dallas 20 .20 Graterford 26 .11 Greensburg 18 .33 Huntingdon 16 .05 Muncy 33 2.24 Pittsburgh 35 .15 Rockview 23 .13 Entire Bureau Population 26.8 .31 Six Institutions (Except Camp Hill and Muncy) 24.6 0 TABLE 4: VETERANS SERVING IN ARMY PERCENTAGE OF ERROR OF INSTITUTION VETERANS IN ARMY ESTIMATE Camp Hill 44 .37 Dallas 76 .21 Graterford 64 .13 Greensburg 64 .43 Fluntingdon 52 .12 Muncy 67 2.46 Pittsburgh 58 .01 Rockview 63 .15 Entire Bureau Population 61 0 Six Institutions (Except Camp Hill and Muncy) 62 0 PAGENO="0070" 2690 TABLE 5: NUMBER OF MONTHS IN ACTIVE DUTY ERROR OF INSTITUTION MONTHS IN DUTY ESTIMATE Camp Hill 21 7.96 Dallas 28 7.58 Graterford 41 8.48 Greensburg 47 37.08 Huntingdon 32 6.89 Muncy 60 112.45 Pittsburgh 31 3.51 Rockview 28 4.63 Entire Bureau Population 33.2 .02 Six Institutions (Except Camp Hill and Muncy) 31.4 .02 TABLE 6: LENGTH OF MINIMUM SENTENCE ERROR OF INSTITUTION MINIMUM SENTENCE (in years) ESTIMATE Camp Hill 2.5 3.48 Dallas 3.7 1.29. Graterford 5.0 1.48 Greensburg 0.8 2.66 Huntingdon 4.0 2.33 Muncy 10.0 51.61 Pittsburgh 5.5 1.76 Rockview 2.5 1.57 Entire Bureau Population 4.0 0 Six Institutions (Except Camp Hill and Muncy) 3.8 0 PAGENO="0071" 2691 TABLE 7: AVERAGE AGE ERROR OF INSTITUTION AGE (in years) ESTIMATE Camp Hill 24.2 4.50 Dallas 30.9 3.79 Graterford 37.3 2.85 Greensburg 30.7 7.80 Huntingdon 32.3 2.11 ~Tuncy 46.3 74.24 Pittsburgh 36.0 2.55 Rockview 31.7 2.61 Entire Bureau Population 33.6 .01 Six Institutions (Except Camp Hill and Muncy) 31.9 .01 TABLE 8: AVERAGE GRADE LEVEL OF EDUCATION ERROR OF INSTITUTION GRADE LEVEL COMPLETED ESTIMATE Camp Hill 10.7 1.11 Dallas 10.3 0.86 Graterford 8.6 3.33 Greensburg 10.5 1.24 Huntirzgdon 10.0 0.48 Muncy 10.5 0.61 Pittsburgh 12.4 1.18 Rockvjew 10.0 0.63 Entire Bureau Population 10.7 0 Six Institutions (Except Camp Hill and Muncy) 10.7 0 PAGENO="0072" 2692 In computing the average grade level in Table 8 above, the grade equivalence of the Wide Range Aptitude Test was used for those inmates who did not have any data pertaining to the grade level completed. TABLE 9: PERCENTAGE OF BLACKS ERROR OF INSTITUTION __________________________ ESTIMATE Camp Mill .35 Dallas .25 Graterford .12 Greensburg .38 Huntingdon .16 Muncy 0 Pittsburgh .16 Rockview .15 Entire Bureau Population Six Institutions (Except Camp Hill and Muncy) 0 TABLE 10, NUMBER OF PRIOR OFFENSES Percentage of Inmates Grater- Greens- Hunting- Pitts- Dallas ford burg~~ don Muncy ~y~gjj 52 29 190 68 67 69 24 24 0 10 33 9 8 15 0 10 0 19 8 2 0 16 0 11 PERCENTAGE OF BLACK VETERANS 53 44 74 27 36 0 46 33 52 51.9 0 Number of Camp Prior Offenses Hill None 93 Rock- view 57 12 8 10 0 4 PAGENO="0073" 2693 (TABLE 10 CONT) 5 0 4 11 0 6 6ornore 0 4 11 0 U 0 4 7 Co 4 3 TABLE U: BREAKDOWN OF OFFENSE TYPES Camp Grater- Greens- Hill Dallas ford ~g_ Hunting- don Pitts- ~ Rock- view 6 0 4 0 6 0 4 7 40 12 12 29 0 22 67 36 10 0 4 3 18 6 0 12 10 0 18 4 32 0 31 0 0 6 16 0 0 2 20 0 21 18 12 5 0 10 33 14 12 6 Assault Burgl ary Forgery Homicide Narcotics Prison Breach Robbery Sex Offense Theft Vehicle Violations Others INSTITUTION Camp Hill - 83 Dallas - 143 Graterford - 384 Greensburg - 55 Huntingdon - 254 0 0 0 18 2 1 27 4 TABLE 12: BREAKDOWN OF MILITARY SERVICE BY WAR ERA POST KOR5A PRE WWII KOREA VIETNAM VIETNAM N (5) N (5) N (8) N(S) 2 (2) 4 (5) 10 (12) 61 (74) 10 (7) 12 (8) 27 (19) 82 (57) 42 (11) 47 (12) 91 (24) 169 (44) 2 (4) 3 (5) 7 (13) 38 (69) 12 (5) 22 (9) 47 (18) 136 (53) 0 2 0 2 OTHER N (S) 6 (7) 13 (9) 35 (9) 5 (9) 37 (15) PAGENO="0074" 2694 (TABLE 12 CONT) 1 (8) 2 37 (13) 77 19 (6) 51 145 312 Muncy - 13: Pittsburgh - 285 Rockview - 304 TOTAL - 1521 PERCENTAGE OF TOTAL BUREAU POPULSTION 2 (15) 35 (12) 20 (7) 125 (15) (27) (17) 5 (39) 111 (39) 183 (60) 785 525 VIETNAM 3 (23) 25 (9) 31 (10) 156 105 OTHER 85 105 205 WWII KOREA PONT KOREA PRE VIETNAM PAGENO="0075" TABLE 13 ELIGIBILITY/NON ELIGIBILITY FOR GI BILL EDUCATION BENEFITS IN PLANNING Elicrible P7i~ih1~ Ineligible nelige Ine1ig~b1e Ineligible Ineliqjble Vietnam Post Korea Korean Institution rvi Pre Vietnam Service Camp Nill 31 (37) 5 (6) 4 (5) Dallas 63 (44) 24 (17) 12 (8) Graterford 112 (29) 69 (18) 36 (9) Greensburg 28 (51) 7 (13) 2 (4) Nuntingdon 89 (35) 33 (13) 16 (6) Muncy 2 (15) 0 (0) 1 (8) Pittsburgh 73 (26) 49 (17) 14 (5) Rockvjew 126 (41) 41 (13) 13 (4) Entire Bureau Population TOTAL 524 228 98 Percentage of TOTAL Bureau Population Not sepal Less than ted from Less than 181 days military WWII Service general dis- active service c or charges (all duty (all info not prior wars) wars) available N (%) N (~) N (~) N (~ 2 (2) 20 (24) 14 (17) 7 (9 14 (10) 24 (17) 0 (0) 5 (3 38 (10) 82 (22) 12 (3) 26 17 3 (6) 4 (7) 7 (13) 4 (6 10 (4) 49 (20) 21 (8) 29 (11 3 (23) 4 (30) 1 (8) 1 (8 35 (13) 69 (24) 26 (7) 14 (5 14 (5) 68 (22) 13 (4) 21 (7 Post WWII Pre Korea N (~~) 0 (0) 1 (1) 9 (2) 0 (0) 7 (3) 1 (8) 5 (2) 8 (3) 31 119 320 94 107 (35) (15) (6) (2) (8) (21) (6) (7, PAGENO="0076" TABLE 14 TYPES OF REQUESTS FOR ASSISTANCE CAMP HILL DALIJLS GRATERFORD GREENSBURG HUNTINGDON MTJNCY PITTSBURGH ROCKVIEW TOTAL Request or Need N N N N N N N N N Institutional Skill Training/Education 49 175 378 34 206 8 59 131 1040 GI Bill Education Benefits (while in- carcerated) 13 42 78 12 42 2 23 50 262 Post-Release Skill Training/Education 8 32 59 6 35 0 4 44 188 GI Bill Education Benefits (when released) 11 38 82 10 42 3 0 48 234 State or Federal Grants or Loans for Education (when released) 14 37 75 9 41 1 39 50 266 Emergency Assistance (family) 6 14 34 4 13 0 5 17 93 Discharge Review 22 31 53 4 60 2 25 50 247 Vietnam Bonus 3 6 23 3 9 0 1 10 Employment (when released) 12 31 70 7 50 1 8 39 218 Home Loan (when rel eased) 8 28 50 8 38 1 12 49 194 Other (while incar- cerated and when released) 11 10 66 9 27 2 22 37 184 TOTAL 157 444 968 106 563 20 198 525 2981 PAGENO="0077" 2697 TABLE 15: FREQUENCY OF REQUESTS FOR ASSISTANCE Number ~gy~st or Need 1040 Institutional Skill Training/Education 266 State or Federal Granst or Loans for EducatiOn (when released) 262 GI Bill Education Benefits (while incarcerated) 247 Discharge Review 234 GI Bill Education Benefits (when re- leased) 218 Employment (when released) 194 Home Loan (when released) 188 Post-release skill training/education 184 Other; while incarcerated and when released 93 Emergency Assistance (family) 55 Vietnam Bonus PAGENO="0078" 2698 6. GENERAL PARAMETERS OF VETERAN POPULATION Tables 2 through 11 show the following general characteristCS of veteran-inmates: (1) Only 4.89~ have dishonorable discharges while 26.8~ have bad conduct, or dishonorable, or undesirable discharges (2) 6l~ of the veterans served in the Army (3) On the average, a veteran served 33.2 months in service and has 4 years of minimum sentence (4) On the average, a veteran is 33.6 years old and has a level of education between 10th and 11th grades (5) 529~ of the veterans are black (6) On the average, burglary and robbery are the most prevalent offenses (7) On the average, 64~ had no prior offense, l4~ are first offenders, 22~ had 2 or more prior offenses All these results are derived with a 99~ confidence level, and except for Table 2, the error of estimate is virtually zero. Hence the facts above are highly reliable. Since the age level of the total (veteran and non- veteran) inmate population is nearly 27 years and the grade level is approx- imately 5th grade, clearly the veterans indicate a higher age level and more maturity in education. A look at the last column (error of estimate) in each table shows that Muncy has relatively high amount of error. The reason is that Muncy is the only state correctional institution for women in Pennsylvania and only 7~ (Table 1) of the population are veterans, consequently, the sample esti- PAGENO="0079" 2699 mates for Muncy are widely divergent from those at other institutions. Table 12 shows the following characteristics of veteran-inmates: (1) 52% are Vietnam era veterans (2) 20% are post-Korean but pre-Vietnam era veterans (3) 10% are Korean era veterans (4) 10% are post-WwIr but pre-Korean era, or not separ- ated from military service, or information is not available (5) 8% are WWII veterans (July 1946 was used as the WWII cut-off date) Table 13 shows the following characteristics of veteran-inmates: (1) 50% are eligible for Vietnam era G~ Bill educa- tional benefits; 35% are Vietnam era veterans while an additional 15% are post-Korean but pre-Vietnam era who are eligible under Vietnam era GI Bill (2) 21% are ineligible for educational benefits because of a less-than-general discharge; this figure is based on a 100% sampling and varies slightly from the 20% sampling (3) 8% are ineligible for educational benefits because they are WWII veterans (4) 7% are ineligible for educational benefits because they are not separated from the military service or are temporarily considered ineligible because in- formation is not available (5) 6% are ineligible for educational benefits because they are Korean conflict veterans PAGENO="0080" 2700 (6) 69~ are ineligible for educational benefits because they have served less than 181 days of active duty (7) 2~ are ineligible for educational benefits because they are post-WWII but pre-Korean conflict veterans In Table 13 those veterans ineligible for more than one reason were counted only once beginning with the right ineligible column and working left. 7. VETERAN-INM4TES ASSESS THEIR NEEDS Six hundred and forty-three veteran-inmates attended small group benefits briefings organized and coordinated by PAVE in January, February, and March 1975. This was accomplished with cooperation from the Bureau of Correction, Department of Military Affairs-Bureau of Veterans Services, and Veterans Administration. This figure represents 54.4~ of veterans incarcera- ted on the briefings days. Inmates filled out Veteran Request for Assistance (need assessment) Forms following the briefings. Results of this 54.4~ sam- pling are incorporated in Tables 14 and 15. Tables 14 and 15 show the following: (1) Each inmate asked for assistance in approximately 4 - 5 categories of the request for assistance form. (2) Institutional skill training/education was the most prevalent request; many inmates indicated first, second, and third preferences for training; requests totaled 1,040. (3) 7~o hundred and sixty-six requested post-release state or federal grants or loans for education (4) Two hundped and sixty-two requested to use CI Bill benefits while incarcerated PAGENO="0081" 2701 %5) Two hundred and forty-seven requested a review of military discharge (6) One hundred and eighty-four requested assistance on individual problems which were indicated under "other" category. After identifying veterans and completing initial benefits briefings and needs assessment the Pennsylvania Department of Military Affairs-Bureau of Veterans Services arranged personal follow-up counseling for more than 700 veterans in a wide variety of need areas. The Veterans Administration offices in Philadelphia and Pittsburgh assisted in this follow-up. 8. WHAT NEXT As reported in Section 3, the primary purpose of gathering data on veteran-inmates is to assist them in taking advantage of veterans educational benefits. * Veteran-inmates will be encouraged to take advantage of educational benefits. In order to be eligible a veteran must meet the following three requirements: (1) Separated from military service under honorable conditions (2) Separated from service after January 31, 1955 (3) 181 days active duty or more Participation in educational programs will not be restricted by grade level completed. In view of the statistical facts reported in Section 6, 50 per cent will be eligible for GI Bill educational benefits. The monetary value of such benefits is quite significant: $270 per month for full-time instruction and $135 per month for half-time instruc- 78-226 0 - 77 - 6 (Pt.4) PAGENO="0082" 2702 tion. After meeting educational expenses, a veteran can save the balance of the monthly allowance. This could provide a source of support for the veterans family or be kept in trust to meet educational (or other expenses) upon release. In order to insure the highest success of the project, corrections staff will be encouraged to give veterans fullest consideration for enroll- ment in institution secondary and post-secondary programs. Prison caseworkers are following-up to enroll veteran-inmates in requested education programs. Many will not begin until summer and fall, 1975. Follow-up is being docu- mented. The goal will be to increase significantly veterans participation in educational programs. The Pennsylvania Department of Education will develop curriculum guidelines to have non-college academic and vocational programs approved for veterans training. Instructional hours will have to be expanded to at least 12-15 or 25-30 hours per week. The Department of Military Affairs will pro- vide maximum assistance to incarcerated veterans and veteran ex-offenders and will visit institutions on a bi-weekly basis. Early identification of the veteran at the time of incarceration will be implemented to include the GI Bill in prescriptive planning. Educational goals will be established for each veteran-inmate to meet while incarcerated. Pennsylvania is probably unique in that it has initiated a joint project by the state Education, Correction and Military Affairs Departments and Veterans Administration in helping incarcerated veterans help themselves. PAGENO="0083" 2703 Chairman HARTKE. Our next witness is Ron Bitzer, coordinator of Swords to Plowshares, San Francisco, Calif. Please proceed. STATEMENT OF RON BITZER, COORDINATOR OF SWORDS TO PLOWSHARES, SAN FRANCISCO, CALIF. Mr. BITZER. Mr. Chairman and members of the Committee. My name is Ron Bitzer and I am coordinator of Swords to Plowshares, a vet~ erans rights organization based in San Francisco that works with vet- erans who have serious readjustment problems: Physical and psycho- logical disabilities, bad discharges and prison records. In the midst of the 1974 battle over the GI bill for education. I wrote to Senator Hartke thanking him for his work and indicating to him that he is clearly the best friend Vietnam-era veterans have in Congress. I am pleased to have the opportunity to enter comments at these hearings as one who has daily contact with people who are on the receiving end of Veterans' Administration programs and policies. The task of this Committee is to examine the operation of the cur- ient GI bill program and to consider its future. The GI bill has been particularly important to veterans who live in California. The number of veterans in school in California is re- flected in the fact that more than 120 schools have veterans cost of instruction program offices. The San Francisco VA stated last year that more than 16 percent of the veterans in school receiving the GI bill were enrolled in California schools; this trend reflects among other conditions the lower tuition rates in California. Some of the problems in the current GI bill were addressed by Mr. Rufus Wilson of the Veterans' Administration yesterday, and I would like to comment on the problems of overpayments and work-study. Mr. Wilson explained that the VA has taken steps to reduce the number of overpayments that occur, but little discussion ensued about retrieving the money once the overpayment has occurred. Veterans tend to be more mobile than other segments of society; it is safe to say that abrupt changes in school attendance will continue with overpayments. A veteran with an overpayment faces the prospect of the VA taking the full amount of the GI bill checks until the debt has been canceled. rfhis procedure has the effect of discouraging the veterans from re- turning to school. Veterans would prefer to spread repayments over the. months they intend to be receiving the GI bill. I have requested this procedure from the San Francisco VA; the response was that crea- tion of the Centralized Accounts Receivable System in St. Paul renders this step more difficult. Each month a letter must be written to St. Paul requesting that part of the education benefits check be issued. Swords to Plowshares knows veterans who are not returning to school because of the overpayment they face with the VA. As long as no arrangement can be reached, then neither the veteran nor the VA can gain from this impasse. Mr. Wilson also discussed the work-study program which was cx- panded under Public Law 93-508. He stated, "We envision a great deal of work-study usage in terms of outreach services and other activities of the VA, and t.he increased efforts by other activities and organiza- PAGENO="0084" 2704 tions with which we. share our mission. These groups encompass agencies of Federal, State and local governments, as well as recognized national and local organizations." Outreach is indeed a worthwhile project for work-study; for ex- ample, the low participation of veterans in the loan program as de- scribed by Mr. Wilson yesterday suggests the need to make this re- source better known. In San Francisco, however, work-study has been a pork barrel for the assistant director to reward people whom he favors and to deny support from groups that he opposes. Through written communications the San Francisco VA has made it known that Swords to Plowshares, the principal outreach group in San Fran- cisco, is off-limits for any VA personnel. The fact that the VA does not recognize our organization for the purpose of representing veter- ans in VA hearings is the subject of the lawsuit Swords to Plowshares, Flower of the Dragon, and San Francisco Neighborhood Legal Assist- ance Foundation filed against the VA in Federal district court last month. Apart from the difficulties we are experiencing with the VA, I en- dorse the broadest possible use of work-study projects. The 01 bill needs to be supplemented and academic endeavors are complemented with work in other areas. The future of the 01 bill is in doubt in view of the statements of the President and the bills in Congress. Trends in the veteran and military populations suggest that termination of the 01 bill would have serious and long-ranging ramifications for our country. First, consider t.he people who are now entering the military. They are draftees. Not draftees in terms of conscription. They are draftees in terms of the chronic unemployment which falls so heavily on the poor Third World and white people of this country. For them the 01 bill offers some freedom of opportunity to return to school when they are ready and financially able to do so. Do we want to deny this op- portunity to those who see going into the military as a step up for them? Second, consider the nature of the volunteer military. Disciplinary problems have not decreased from the era of the Vietnam war and con- scription. Bad discharges are being given at the same rate and nonju- dicial punishment has actually increased. For many, however, the hon- orable discharges with benefits has been a powerful incentive to put UI) with the military life. Indeed, one of the first training sessions I had pertained to the benefits of an honorable discharge. If future 01's have only the prospect of inadequate medical care from the VA to l~k forward to, will the volunteer military become more restive? Third, look at the readjustment problems of the people who come out of the military. Unemployment has been much higher than the na- tional average, although the GI bill is available. Without the 01 bill more people will face the choice of either remaining in the "volunteer" military or running the risk of not finding employment on the ouside. Finally. some study must be given to the impact of ending the 01 bill, for future veterans on the educational establishment. Consultation with schools could yield some alternatives to the present system of benefits. If some time. is given to the study of the legislation the Pres- ident desires. I submit that much more evidence will become apparent PAGENO="0085" 2705 to show how successful the GI bill has been for so many people in this country. Chairman HARTKE. Thank you, Ron. Anyone else who wants to sub- mit material for the record may do so. We will keep it open for a short period of time in order to obtain additional views and comments. `Without objection, the Committee on Veterans' Affairs stand in recess, subject to call of the Chair. Thank you, gentlemen. [Whereupon the hearings were adjourned.] PAGENO="0086" 2706 [Subsequently, the following written statement from the National Association of College Admissions Counselors was submitted for the record:] STATEMENT FOR THE NATIONAL ASSOCIATION OF COLLEGE ADMISSIONS COUNSELORS by Laura M. Trexler 732 9th Street, S. E. Washington, D. C. / BEFORE THE SUBCC*IMITTEE CM READJUSTMENT, EDUCATION, AND EMPLOYMENT CCMMITTEE ON VETERANS' AFFAIRS UNITED STATES SENATE October 2, 1975 MR. CHAIRMAN AND MEMBERS OF THE SUBCCMMITTEE: The National Association of College Admissions Counselors, an Institutional Membership Association representing High School Counselors and College Admissions Counselors welcomes this opportunity to present justification for continuation of C. I. Bill entitlements for future peacetime veterans. This organization has a commitment to the counseling and guidance of the youth of this nation so that each individual shall have the opportunity to develop him skill and expertise to its full potential so that he may better serve his community, State sad nation; to provide a smoother transition from the secondary school to a post secondary educational experience, whether or not it has been interrupted by military service. Many qualified and well motivated students from the stable middle income fam- ilies are unable to qualify for financial aid for post secondary education. Their parents have been thrifty, refrained from contracting a heavy indebtedness and re- sponded honestly to the information requested on the Confidential Statement which is used to determine eligib{lity for financial aid. These young men and women have in the past, and continue, to interrupt their educational experience by enlist- PAGENO="0087" 2707 -2- sent for military service so that they may qualify for the educational benefits provided by the current Veterans Readjustment Assistance Act. The G. I. Bill has served its purpose well. It has provided an opportunity for many of the vetetans of World War II, the Korean War and the Vietnam Era to complete their education and develop leadership potential. There has never been a financial aid program that ham benefitted so many and generated the financial return to our government that this program has. Statistical reports demonstrate a six to seven dollar return on each dollar thus invested. In contrast, there is no financial return on the investment in Unemployment Benefits or Welfare Payments. We encourage each member of this Committee and the Congress to consider these factors before terminating one of this Countries most rewarding laws. (1) What effect will the termination of this legislation have on the voluntary enlistment of high school graduates at a tine that our military is operating with sophisti- cated technological equipment? (2) Will this result in fewer enlistments, the loss of trained leadership and the need to train more new recruits resulting in a sore expensive military training program? (3) Will it result in a disproportionate en- listment by high school drop outs, poor morale, and inefficient use of complicated and sophisticated weaponry? (k) What alternative program is available or developed to motivate and to provide a well trained, efficient and effective military for the defense of this Country? Title 38-United States Code, Chapter 31f-Veterans Educational Assistance, Sub Chapter I - Purpose, Definitions, Section 165]. states: "The Congress of the United States hereby declares that the education pro- gram created by this chapter is for the purpose of (1) enhancing and making more attractive service in the Armed Forces of the United States, (2) ex- tending the benefits of a higher education to qualified and deserving young persons who might not otherwise be able to afford such an education, (3) pro- viding vocational readjustment and restoring lost educational opportunities PAGENO="0088" 2708 -3- to those servicemen and women whose careers have been interrupted or im- peded by reason of active duty after January 31~ 1955, and (k) aiding such persons in attaining the vocational and educational status which they might normally have aspired to and obtained had they not served their country." This legislation provided educational and vocational opportunities to veterans, which has enhanced and made more attractive service in the Armed Forces. Veterans should be afforded readjustment benefits to assist in the transition from the mili- tary to civilian pursuits. However, since President Gerald Ford has fixed the ter- mination date of the Vietnam Era for the purpose of certain veterans benefits by the Presidential Proclamation dated Nay 7, 1975 the extension of these benefits to men and women in the peacetime service should be clearly differentiated from wartime benefits. The National Association of College Admissions Counselors recognizes that the motives of those who choose to serve in the Armed Forces during times of peace are different from those who serve in wartime, especially since the United States has now initiated an all-volunteer military establishment for our national security. Therefore, it recommends and proposes for serious consideration the continuation of a post-service education benefit and suggests that the appropriation be identified as post-service educational benefits separate and distinct from wartime benefits. Thank you for the opportunity to provide this testimony. The peacetime vet- cram will then be able to make his contribution through his leadership and com- mittment to the same degree as his wartime counterpart. PAGENO="0089" 2709 [Subsequently, the following material concerning education was placed in the hearing record:] PAGENO="0090" 2710 GATEKEEPERS IN EDUCATION: A Report on institutional Licensing I NATIONAL ADVISORY COUNCIL ON EDUCATION PROFESSIONS DEVELOPMENT APRIL 1975 ~iG6~t~ PAGENO="0091" 2711 Gatekeepers in Education: A Report on Institutional Licensing from the National Advisory Council on Education Professions Development April 1975 Room 308 1111 20th Street, N,W. Washington, D.C. 20036 PAGENO="0092" 2712 Waldo R. Banks, Sr. President American Education Foundation Carson, California R. Creighton Buck Professor of Mathematics and Acting Director, Mathematics Research Center The University of Wisconsin Madison, Wisconsin Judy Ann Buffmire Director Rocky Mountain Regional Resource Center The University of Utah Salt Lake City, Utah Mildred M. Curtis Registered Nurse Minden, Nebraska Helen G... Edmonds. Dean of the Graduä~School~. North Carolina Central University Durham, North Carolina Janet Erickson Community Volunteer San Marino, California Thomas R. Hills (Vice Chairman) Chairman, Junior College Division Black Hills State College Spearfish, South Dakota Staff of the Council: Julia N. Jacobsen (Treasurer) Coordinator of Government Relations - Lynchburg, Randol ph-Macon Woman's, and Sweet Briar Colleges Washington, D.C. Henry Lucas, Jr. Lecturer School of Dentistry The University of California San Francisco, California Edward A. Medina Assistant Professor Department of Education Eastern New Mexico University Portales, New Mexico Arnulfo L. Oliveira President Texas Southmost College Brownsville, Texas Martin W. Schoppmeyer Professor of Education The University of Arkansas Fayetteville, Arkansas Walter Tice Classroom Teacher Yonkers, New York George Arnstein Executive Director David Nichols Assistant Director Mary Dilworth Research Assistant Edythe. Jacobs Administrative Assistant Members of the National Advisory Council on Education Professions Development, at the time this report was adopted on March 6, 1975, are listed below: -- Lyle E. Anderson, Jr. (Chairman) Dean Ft. Lauderdale College of Business and Finance Ft. Lauderdale, Florida Hugo A. Sabato Vice President G.R. Hammerlein Agency, Inc. Cincinnati, Ohio PAGENO="0093" 2713 Preface In the annual report of the Council, submitted on January 31, 1975, as required by law, we mentioned that we had two reports in preparation and hoped to have them available in the Sprinq of 1975. Gatekeepers in Education: A Report on Institutiona Licensing is now ready, as scheduled, and presents our recommendations pursuant to a request by the Assistant Secretary for Education presented to the Council at its meeting on September 11,1974. In the context of education professions development, we are pleased to be able to identify a specific Federal role where there is a promise of cost- effective savings and improvements, in the larger context of State and local responsibility. Copies of the report are now beinq distributed to interested Federal and State officials, to leaders in education; after our free supply is exhausted, the report also will be available through the ERIC system. --Lyle E. Anderson Chairman April 1973 PAGENO="0094" 2714 April 1975 Gatekeepers in Education: A Report on Institutional Licensing From the National Advisory Council on Education Professions Development Not only are there abuses in American education, but there is evidence that the abuses are on the rise, or at least that there is increasing awareness that something should be done to protect educa- tional consumers. At the same time there is a strong tradition of state and local control of education. This puts into question any massive Federal effort to introduce and enforce standards of honesty and quality. Further, there is a continuing preference for educational pluralism, for diversity in higher education, for choices in postsecondary education; this makes it extremely difficult for any agency -- Federal, state, local, or voluntary association -- to establish standards, much less to enforce them. Nevertheless, the fact remains that every American school exists by permission of the state (license), or by toleration of the state in the sense that some states have no adequate licensing laws or fail to enforce them. Accordingly we have diploma mills and high-pressure salesmen, fraudulent use of Federa1ly guaranteed loans, administrators who have been run out of one state only to start over again somewhere else, school dropouts who still owe tuition, and graduates who cannot find the jobs they have been promised. To be sure, these conditions are PAGENO="0095" 2715 -2- not endemic, but they are sufficiently prevalent to call for counter- measures to protect students and also to prevent the diversion of Federal funds. Since the licenses permitting these schools to exist are the responsibility of the States, it is to the States that we ought to look for remedies, assisted by Federal funds. The nonsystem of American education is a collaborative effort which involves several levels of government and relies heavily on voluntary standards. To point an accusing finger at the States is not very helpful, especially because the Federal interest may be said to be greater than that of the States. The Federal government has not done enough to alleviate or prevent existing problems. In preparing this report, our Council had expected to recommend a Federal effort to strengthen the hand of the administrators and staff in the various State licensing agencies, including the State Approving Agencies. And this is what we recommend, relying on Title V of the Higher Education Act which calls for the strengthening of educational professions and their development -- the Education Professions Develop- ment Act. More than that, however, our Council concluded that we need to rethink the larger problem of educational abuse. We needto formulate a collaborative new system in which state officials can do a better job, acting with private accrediting bodies, Federal officials, school administrators, and students -- all of whom have a stake in the integrity of American schools. It is this systems analysisand design which PAGENO="0096" 2716 -3- makes up the bulk of our report which then offers some specific recommendations on what Federal agencies can and should do to help themselves, the States, and all of American education. The present system is not working because it seeks to rely on the work of accrediting bodies which are voluntary associations. Their purposes are not the same as those of the Federal agencies which. must by law rely on them, thus the system is less than adequate. Educational abuses are on the rise; students are being defrauded, both financially and educationally. Fortunately, there is a rising chorus of alarm. * The Federal Trade Commission, which has jurisdiction only over profit-seeking schools, has held hearings on how to stop abuses.~ * The Department of Health, Education, and Welfare is sensitive to the problem. Virginia Trotter, Assistant Secretary for Education, specifically asked this Council for our recommendations and thus provided the stimulus for this report.2 * The Education Commission of the States formed a Task Force to prepare a Model State Licensing Law,3 and has now sponsored two conferences on consumer protection in postsecondary education.4 * The Veterans Administration has voiced concern over problems in the G.I. Bill of Rights; the Chief Benefits Director told Congress last year that correspondence schools are our `biggest problem. * The U.S. Commissioner of Education is qreatlyconcerned over the rising default rate in the Guaranteed Student Loan Program. He has hired PAGENO="0097" 2717 -4- a large number of bill collectors and hopes to keep defaults down to a mere 18.5 percent.6 * The Commissioner also arranged for a major study of eligibility; this culminated in Private Accreditation and Public Eligibility, a two volume report (October 1974) by Harold Orlans, Jean Levin, Elizabeth Bauer, and George Arnstein (Washington: Brookings Institution and National Academy for Public Administration).7 We want to acknowledge our heavy reliance on this report for our understanding of the problem; our recommendations, on the other hand, are our own. * The General Accounting Office has predicted that defaults in the GSLP may exceed 24 percent.8 * The Federal Interagency Committee on Education formed a Subcom- mittee on Consumer Protection whose report recommends a variety of needed reforms.9 * The clamor in the media, both popular and professional, is rising: -- The Boston Globe ran a series of articles which was inserted in the Congressional Record and reprinted by the thousands)° -- The Washington Post ran a four-part series of articles by Eric Wentworth, plus additional follow-up stories.11 -- American Education ran two articles by George Arnstein which described abuses but also noted the difficulties of dealing with them.12 -- The Reader'sDigest, in June 1974, printed an article by 78-226 0 - 77 - 7 (Pt. 4) PAGENO="0098" 2718 -5- Jean Carper entitled `Career Schools Aren't Always What They Appear to Be." -- The Phi Delta K~pp~~ denounced diploma mills and focused on proposals to deal with abuses in proprietary schools.13 * Congress has held hearings on the subject: -- The House Committee on Government Operations, Special Investigations Subcommittee, looked into proprietary schools and issued a report on them and recommendations in late 1974.14 -- The House Education Subcommittee chaired by Representative James O'Hara heard witnesses as to problems and suggested solutions, especially in student financial assistance programs.15 -- The Senate Subcommittee on Education, under Senator Claiborne Pell, asked several witnesses about accreditation and eligibility for Federal funding, and is still looking for a way to narrow eligibility to those schools which are "clean."16 In short, there are serious problems and they are becoming more visible. Competition among schools is also on the rise, thus raising the spectre of increasingly nasty practices involving a large number of Federally funded programs. It is the rise in these programs which explains the Federal interest, and which supports our recommendations for several forms of immediate Federal assistance. 1. There is a Federal interest in combating fraud and abuses. They undermine our national well-being, our confidence in ourselves, PAGENO="0099" 2719 -6- and weaken our confidence in law, orderly government, and the stability of society. 2. Federal funds are not being used for the purposes intended. When a grateful Nation enacted the G.I. Bill of Rights, it sought to make a monthly stipend available to veterans, not to have the money diverted into schools for bartenders~7correspondence schools with dropout rates as high as 90 percent~8or to sharp operators hiding behind quasi-educational trappings. * When Congress passed the Federally Insured Student Loan Program, it intended the guarantee and the interest subsidy to help deserving students. The program has been exploited by salesmen on commission and by advertising brochures which deceive or distort. For example, some schools talk about high-paying jobs for computer programmers but actually offer courses for key punch operators at lower pay rates. * When Congress enacted the Basic Opportunities Grants to help students pay for tuition, it did not envision the diversion of these and other Federal funds for the enrichment of self-annointed pseudo-. educators, operating diploma mills while hiding behind some church affiliation. 3. As education becomes more innovative and flexible, it increas- ingly is open to use -- and abuse -- across state lines, thus providing a third dimension to the Federal interest, in this case the National interest to help the States work together in the accomplishment of better systems to help each other. PAGENO="0100" 2720 -7- Again, in short, there is a Federal interest in keeping the education system open, flexible, honest and effective, under traditional state and local control. There also is a whole series of laws which prohibit Federal control or intervention. Here is just one example (Sect. 1.782, Title 38 U.S. Code): No department, agency, or officer of the United States... shall exercise any supervision or control... over any State approving agency, or State educational agency, or any educational institution. We affirm the responsibility of the States in education. We also note that every school in the United States exists by permission of the States. (The exceptions are noted only for the record: The various military academies, certain schools on Federal Indian reservations, and a few universities in the District of Columbia with Congressional charters.) It also follows that existing abuses are the responsibility of the States, sometimes attributable to nonexisting and obsolete laws, sometimes to weak laws, sometimes to weak administration, and sometimes to mere neglect. Further, the State responsibilities have been under- minded by the private, voluntary accrediting bodies which (in all innocence) pursue their own purposes and have been used increasingly as indicators of quality and competence, by State and Federal officials alike, when their original purpose was not to be so used. Without going into the weaknesses of the accrediting bodies at this time, we merely note that we agree with the Federal Trade Commission which said that the Federal government does not accredit schools or regulate their quality. Further, if a school is accredited, it means PAGENO="0101" 2721 -8- that it meets the minimum standards required by a particular accrediting 19 agency. Similarly, the U.S. Commissioner of Education, charged by law with recognizing the accrediting bodies, nevertheless has acknowledged their shortcomings.2° And the accrediting bodies sometimes feel exploited by State and Federal officials who want them to do things and to enforce standards which the accreditors do not wish to undertake or which they feel they lack the competence to assess.. Since our purpose, in this report, is not merely to point out shortcomings in the existing practices but to identify needed remedies, we need to describe, in very simple terms, just how the present system of accreditation, licensing, and eligibility works. ~jj~jj~j~lityfor Federal Funds Given the various Federal funding programs, the question arises how Federal administrators are to identify the good schools, the competent schools, the schools worthy of being ~]jgjble for Federal programs, as juxtaposed to the schools which should be excluded. One answer could be the establishment of a national Board of Eligibility (or some variation of this idea), but this has been resisted by the Congress and many education officials but not by all of them.21 Instead of some form of Federal approval, there are in operation at least two systems which are neither fully separate, nor fully merged, and which furthermore are somewhat competitive. A case could even be made that there are three systems, reflecting the .intertwinings of the operations. PAGENO="0102" 2722 -9- 1. ~ eLi~nsin: Every school, to be eligible for federal funding, must exist with the approval or by permission of the State. Normally we would say that it must have a state license, but in practice most state laws have so many exceptions, and so many loopholes, that the wording must be as awkward as it is here: The school must exist by permission of the State. In practice, this means that a school which has its license revoked, also will or should have its Federal eligibility revoked, Unfortunately there is no effective communication system, no clearinghouse, so that revoc,atiOn does not always lead to prompt cancellation or suspension of eligibility. Because State licensing tends to reflect minimum standards, a kind of permit to exist at some minimal level, there have arisen two additional systems to determine quality: Accreditation and State Approval (for veterans). 2. ~ This single word hides within it several different concepts and arrangements. There have been a few accrediting associations which were set up to deceive. They are intended to look legitimate: since accreditation is a private, voluntary matter, there is nothing much that can be done about them, although some have been abolished by court order. In order to identify at least some of the more effective and reputable accrediting associations, the U.S. Commissioner of Education is charged by law to `recognize' them. Here is the exact wording: * .. the Commissioner of Education shall publish a list of nationally recoqnized accrediting agencies and associations PAGENO="0103" 2723 - 10 - Wtraining offered b~i~ authority as to the qua lit~ (38 USC 1775, emphasis added) When educational administrators speak of reco~nized accrediting bodies, this is normally what they have in mind. On the other hand, the reputable National Commission for Accrediting, housed at One Dupont Circle in Northwest Washington, also recognizes accrediting associations, and the NCA list is similar to the Commissioners list, but it is not identical. (NCA, on January 1, 1975, merged with Federation of Regional Accrediting Commissions for Higher Education (FRACHE), to form the new Council on Postsecondary Accreditation (COPA), ~:hich also recognizes accrediting bodies.) Within the recognized accrediting bodies there are two major groupings: The regional associations which make up FRACHE perform institutional accreditation. This means that the entire college is accredited; it does not mean that all of its departments are equally good, just that the school as a whole meets the standards of the regional accrediting body. On top of regional, institutional accreditation, there also is specialized accreditation, normally conferred by a specialized body which will accredit a specialty or department only if the college as a whole has previously been regionally accredited. Examples are the American Psychological Association or the National Council for Accredi- tation of Teacher Education (NCATE). Vocational schools and business schools may apply to become members PAGENO="0104" 2724 - 11 - of such accrediting bodies as the National Association of Trade and Technical Schools or the Association of Independent Colleges and Schools (formerly the United Business Schools Association), or other specialized bodies which, if they are recognized by the U.S. Commissioner, makes the schools and their students eligible for Federally funded programs. Proprietary schools -- i.e., schools organized to make a profit -- compete for accreditation in many fields, especially in the vocational and home-study sector. Accreditation, even when performed by an association recognized by the U.S. Commissioner, is not necessarily an indicator of quality, no matter how many students, parents, high school counselors, and newspaper columnists adhere to a different opinion. The confusion derives from the historic beginnings of accreditation, when the associations in fact sought to inspect for quality. Over the years that concept has changed, however, and the accrediting bodies now seek to determine whether each school is making satisfactory progress toward its goals. More than one critic has ridiculed this procedure by a reductio ad absurdum: This should mean that a diploma mill which openly states that its goals are to make money and to satisfy customers with educational pretensions, should be accredited if it sucessfully progresses toward its goals. In fact, the Federal Trade Commission advises students applying for proprietary schools that accreditation is not a reliable indicator of quality; the Congress has instructed the V~terans Administration and its approval system that it may rely on accreditation.~ut need not do PAGENO="0105" 2725 - 12 - Most accrediting bodies will admit that they lack the funds, the staff, and the scope to inspect truly an entire school, its staff, facilities, budget, finances, and then render a timely and well-rounded verdict. The problem with private voluntary accreditation is not that it is being done badly, but rather that State and Federal officials need some kind of a judgment in the absence of an inspection and rating staff of their own. Federal officials have no such staff, and many states do not have an effective one. 3. State Approvals: Recognizing the shortcomings of private, voluntary accreditation, the Veterans Administration spends about $10 million a year in an effort, to assure the integrity of its educational programs for veterans which cost more than $2 billion in recent years. The system is mandated by law and calls for the Governor of each State to appoint a State Approving Agency whose job it is to review every course as to its eligibility for veterans benefits. Given the thousands of courses in every state, the State Approving Agency may rely on accreditation as an alternative, despite the fact that accreditation is institutional (or departmental) and the State Approving Agency is supposed to review every course. What is interesting about the SAA/VA system are the following points: * It is operated by State officials but under Federal contract and reimbursement from the Veterans Administration. . * It reflects a lack of confidence in the Statelicensing system. PAGENO="0106" 2726 - 13 - If State licenses were effective, as indicators of quality and probity, there would be no need for the redundant State approval system. * It reflects a lack of confidence in the accrediting bodies, even though they have been recognized by the U.S. Commissioner as providing assurance of quality of the schools they accredit. If accreditation were reliable, there would be no need to leave discretion with the States whether to rely on accreditation or not. * The SAA/VA system does not prevent abuses and fraud, as shown by the continuing problems of the Veterans Administration. Admittedly the system works better today than it did in the late 1940's when things got so bad that the Congress and the President of the United States called for ur9ent improvements. * In some States, the licensing and approval functions are combined, with the same staff performing both functions. State decisions, within limits, are then verified by the Veterans Administration through so-called compliance visits. The State/Federal combination has its limits, because the Federal inspectors confine their work to administrative matters, carefully observing the prohibition against Federal control of education (meaning content, curriculum, etc.). * Finally, when we analyze SAA/VA system through every appeal and review procedure, we wind up with a Federal determination of eligibility: The Administrator of Veterans Affairs has the last word regarding approval and eligibility. We add hastily that *we know of no abuses of this authority but we do note that the decision is Federal, in accordance with the law and with V.A. regulations. PAGENO="0107" 2727 - 14 - 4. To close the loop; State 1icensinj~ laws are heavily inter- twined with accreditation. In many States, a college which is regionally accredited is exempt from licensing; i.e., the State relies on a private body for its determination of standards. Florida is an example of this. In California, there is not only a similar exemption, but the licensing standards actually derive from accreditation. According to Section 29077 (a) 2 of the Education Code, the Superintendent of Public Instruction is to make sure that his licensing staff satisfies itself that the non-accredited college is of a caliber essentially equivalent to the standard exacted by the private accrediting bodies. It is ironic that some accrediting bodies may put a school on probation, or may put conditions on its renewal or extension, while the state, which relies on accreditation, may be totally ignorant of such limitations. We know of cases where a school had its accreditation revoked, while its license (or exemption from licensing) continued. Conversely, we know of schools which had been enjoined from certain abuses under court order, while Federal eligibility continued. In still other cases, State officials clamped down under a new licensing law, while some schools closed and other merely moved to another state. Each State, each accrediting body, and most State approving agencies could be operating at great effectiveness and with great diligence, but lacking a national clearinghouse and open accountability, the abuses sometimes merely move across state lines. It is against this defect that the Denver Conference (March 1974, convened by the Education Commission of the States) called for the establishment of a national clearinghouse to exchange relevant information.24 PAGENO="0108" 2728 - 15 - The Need for Federal Leadershil and Support Laws, regulations, and site visits all depend on human beings. They, in turn, must have competence and dedication, as well as funds and political support to carry out their assigned functions effectively. In the case of State licensing staffs, the gatekeepers of American education have been neglected and there is no systematic body of knowledge on how to license and approve schools. For example, we know of no American university which offers a course in techniques of site visits (which is a polite way of saying inspections), of licensing and accreditation. Similarly, we know of no major effort to develop better techniques, to train licensing staff, to design better systems, to develop indicators of quality, and all of the related subjects. There have been some scattered efforts, including the work of Leland Medsker at the University of California, of Wellford Wilms under the sponsorship of the National Institute of Education, and of Harold Orlans and his colleagues at the Brookings Institution and the National Academy of Public Administration. Similarly, the Southern Association of Colleges now runs summer workshops for the chairmen and some members of visiting teams, while the New York State Department of Education has a training course for visitors to technical schools and two-year-colleges. Further, the V.A. has made some recent efforts to run training sessions for SAA staff, while the annual meeting of the National Association of State Approving Agencies includes some sessions where members exchange information and techniques. : PAGENO="0109" 2729 - 16 - What these scattered efforts lack is a common focus, effective linkage, and the funds needed to provide staff training. Our Council, under the heading of education professions development, recommends the use of Federal funds to bri ng about needed im~provements i n the staff~, tra i nij~~~nd effectiveness of these gateke~pi ng functions, especially because weak licensing efforts defeat the efforts~ of thousands of competent teachers and students who may be relying on illusory criteria of quality. Toward a Self-Enfor~j~ Given the fragmentation of the various Federal efforts, the compartmentalization of the States, the separate existence of the private accrediting bodies, it is not surprising that abuses continue. Worse yet, where they are known to exist, there is little effective enforcement or countermeasures, reflecting to a great extent the finding by Virginia Knauer, Director of the Federal Office of Consumer Affairs, who told a national conference in Knoxville that nobodyis in charge of protecting the educational consumer.25 If nobody is in charge, it follows that nobody is taking effective steps to eliminate the undesirable schools and their administrators, even though an occasional warning or revocation may give the illusion of enforcement. If nobody is in charge, it could also be concluded -- and we emphatically do not so conclude -- that there is a need for some kind of a central enforcer, assisted by a phalanx of school inspectors. Since we seek neither central supervision and control, nor a large number of inspectors representing several different Federal agencies, PAGENO="0110" 2730 - 17 - we look to a reform of the system in such a way that it will be as nearly self-policing and self-enforcing as possible. An example of a self-enforcing law is the issuance of license tags for automobiles, with annual expiration clearly noted. These tags make it possible for every police officer to spot an offender, for every citizen to point an accusing finger and, because the system is so nearly self-explanatory, provides major incentives for automobile owners to observe the law by timely purchases of their annual license plates (or renewal stickers). In our search for a comparable system for providing educational quality and probity, we identified these criteria for a largely self- enforcing system: 1. Information and Disclosure: Schools and colleges must publish the standards and rules according to which they operate. Participation in this disclosure program should be voluntary, but there will be major incentives to participate by linking eligibility for all Federal programs to full disclosure. If schools have a policy of no refunds, they ought to say so clearly and openly, thus avoiding complaints from students who think they have refunds coming. If they offer a liberal education, the goals should be stated openly, and if they provide a narrow job- oriented offering, possibly without such "frills" as counseling and placement services, let them disclose this openly. Adequate disclosure and ready access to school policies will `enable the student to complain or seek redress. 2. Redress of Grievances: Complaints, however, do not serve much useful purpose if the student does not know where to address his PAGENO="0111" 2731 - 18 - complaint, or if there is no agency with the power to investigate the claim and then, if warranted, to do something about it. We suggest that the State licensing authority may be the right place for the receipt of complaints, with a competent staff to keep track of complaints statistically; further, to effect redress of grievances or to suspend or revoke the license of the school, in order to put some muscle behind the license. It is our hope that the system will serve to pr~y~nt complaints in the first place, that the system will be largely self-policing and enforcing, but this will happen only if there is some ultimate enforce- ment and penalty in sight, including the revocation of eligibility for Federal funds. 3. Intermediate Steps: We visualize a series of intermediate steps in making this new system more effective. It should start quickly, although the early list of items to be disclosed by the schools may well be imperfect and incomplete. Because this area of licensing and standard-setting has been neglected, the state of the art is relatively primitive. This explains in turn why some of the personnel now performing licensing and related functions are working at often nonprofessional levels. We urge Federal support to underwrite five areas of activity which will help to make the proposed system work more effectively, will save Federal funds now being diverted to fraudulent and unintended purposes, and will help to professionalize a group of practitionerswho operate PAGENO="0112" .2732 - 19 - largely on the basis of improvisation rather than a base of knowledge. There is no useful estimate as to the size of the wasted Federal funds, or the amount of diverted Federal dollars. What is known is that the default rate under the Guaranteed Student Loan program was `much too high" even before the emergence of the economic recession. There is widespread agreement that the defaults were largely attributable to willful abuse, to exploitation, although economic hardship is now an increasing factor. Federal budget requests to cover the defaults have 26 been rising; for FY 1975 they rose from $89 million to $115 million. 4. Staff Development: Not only do we recommend that the system be redesigned so as to be largely self-policing, but we also recommend a focused effort to develop the competencies and performance ~f those persons charged with operation and safeguarding and improvement of the system. We include here the State licensing staffs, State approving agencies (which in some states are the same as the licensing staff), Federal officials charged with institutional eligibility, and the participants in the private, voluntary accreditation enterprise. In too many cases today, the State licensing and State approval staffs suffer from neglect. The State approving agencies often lead more or less separate lives, while actual site visits are performed by essentially untrained amateurs: a dentist, for example, probably is expert in the matter of dental technicians, but unskilled in his capacity as inspector of educational, administrative and fiscal aspects of an entire institution. PAGENO="0113" 2733 - 20 - Accrediting teams are made up of subject-matter specialists who are in most cases untrained in those areas where educational abuses abound: false promises, misleading advertisements, shady fiscal arrangements, diverted loans, and all of the other collisions which occur between the interests of two or more different parties. 5. Students as Monitors: To the extent that there are abuses and fraudulent practices, they reflect the conflicting interests of students (who are exploited) and administrators, who seek to make a profit and, in some nonprofit schools, seek to make the school grow, or at least, to keep it from going under. Students are the transients while the administration is more or less permanent. Students are individual purchasers of services while the administration is a single purveyor. Students, in short, are at a disadvantage, especially because too often they cannot even learn what their rights are and how to secure them. The remedy thus lies ma commonly shared list of public disclosures. By providing the fullest possible information to students, they can assert their rights, they can object if they are promised modern tune-up equipment in a class for auto mechanics but actually are taught on equipment which is demonstrably obsolete. Students, on their own, can assert their own rights, but only if they know what they have been promised. Students can discharge many of the functions theoretically assigned to visiting teams, licensing staff, and others, always provided that they have access to full information to be. disclosed by the schools. 78-226 0-77 -8 (Pt.4) PAGENO="0114" 2734 - 21 - Further, students need to know where to file a complaint, where to seek redress. Without such knowledge, they can assert their rights only with great difficulty. It is in this context that we visualize the students as the cornerstone of a self-enforcing system based on adequate disclosure of what the school promises and how it operates, plus the knowledge that the student can seek redress. In practice, we hope that the system will operate in such a way that the schools will provide noreason to complain, that the schools will openly proclaim what their goals are, how they operate, thus providing the student with a clear choice between a proprietary school which claims no frills, not even counseling services, as juxtaposed to a course of study at a competing school which may take longer but may also include a larger range of services. The intent of our proposed system is not to multiply complaints but to obviate them. Five Areas for Federal Support As indicated earlier, there are several areas of Federal interest in designing a system which will be more honest, and which will give great.~r evidence of educational quality (which, in turn, may be defined in a variety of ways). This system, however, will not come into being by itself but will require continued leadership along the lines well begun by the Federal Interaqency Committee on Education (FICE) under the chairmanship of the Assistant Secretary of HEW for Education. PAGENO="0115" 2735 - 22 - Concurrently, we recommend the establishment of a Center (by whatever name) to be operated by a nonprofit organization with five very specific assignments. The Center could be entrusted, for example, to the Education Commission of the States; it could be funded by several Federal agencies or by a single agency. Its purposes would be to help create a system which would be synergistic rather than fragmented, essentially free of Federal control, but organized in such a way that schools would find it desirable to operate under rules of full disclosure and clearly defined rules. The Center, which would quickly cost several millions of dollars per year (after an initial development grant of, say, half a million dollars for the first year), should cover five areas worthy of Federal support: 1. Technical_assistance to the_States: The idea here is not so much to bring in experts but rather to help State officials to meet, to compare experiences, to share successful techniques, and thus to help each other, assisted by the staff of the Center. 2. Development of evaluation tools and techniques: Out of shared experiences the Center would design, test, and publish checklists, tools, techniques, handbooks, to help State licensing and Approving Agencies do a better job. For example, current Federal law says that the State Approving Agency shall ascertain that a schools administrators, directors, owners, and faculty are of good reputation and character." (38 USC 1776, c,l2). Since it is difficult to ascertain such reputation, PAGENO="0116" 2736 - 23 - the States typically disregard this requirement and a shady operator may leave one state in order to set up a new corporation in the next state. The Center would devise techniques to deal with this type of problem. 3. Establishment of an information clearinghouse: At the March 1974 meeting on consumer protection in postsecondary ~.z~t~catior (sr~rsore~ by the Education Commission of the States, the Federal Interagency Committee on Education, and other agencies including the V.A.) the conference report emphasized the need for a clearinghouse of information, for a sharing of data between state agencies, Federal agencies, private bodies (like accrediting agencies) and among the States. 4. Evaluation and research: There is increasing interest in enhancing honesty and quality in education, but there is not enough evaluation and research of current licensing and accrediting activities. Very little is known; the V.A., under the law, tends to support tradi- tional methods and educational structurè~, in part because it lacks knowledge and evidence permitting it to encourage change and approval of innovative practices. Obviously a research and demonstration effort will help improve regulatory efforts. 5. Staff Development and Training: The State Approving Agencies now operate an annual workshop in Washington wnich enjoys indirect V.A. support, in part because the V.A. authorized the use of Federal contract funds for this type of travel and subsistence, and also because the V.A. provides speakers and resource persons. The State licensing staffs get PAGENO="0117" 2737 - 24 - no Federal help at all, except for general funds under Title V of ESEA.27 In addition, at the instigation of the Director of Benefits, the V.A. Education and Rehabilitation staff held a series of training sessions during 1974. These efforts, though positive, lack continuity; they also would benefit from administration through an agency which is neither Federal nor State, thus offering less of a threat to either party. The shortcomings of presently employed staff in many of the State licensing and approving agencies are well known, can be documented, and call for major improvements. The idea is not to find blame; the idea is to benefit all students. First we need to reform the system; and then we need to help the gatekeepers to operate the system in the public interest. And that is why our Council calls for.the professional development of the institutional gatekeepers.# PAGENO="0118" 2738 - 25 - FOOTNOTES 1 Federal Trade Commission, Notice of Public Hearings, Federal Register, August 15, 1974, 39 F.R. 29385. 2 Meeting of the National Advisory Council on Education Professions Development, September 11-13, 1974, Washington, D.C. 3 Model State ~~islation - Report of the Task Force on Model State Legislation for Approval of Postsecondary Educational Institutions and Authorization to Grant Degrees, Report Number 39, Education Commission of the States, June 1973. 4 First Conference~on Consumer Protection in Postsecondary Education, March 18-19, 1974, Denver, Colorado; Second Conference on Consumer Protection in Postsecondary Education, November 14-15, 1974, Knoxville, Tennessee. 5 Odell W. Vaughn, in testimony before the House Subcommittee on Education and Training of the Committee on Veterans Affairs, September 25, 1973. 6 Testimony before the Subcommittee on Education of the Senate Committee on Labor and Public Welfare, Wednesday, September 18, 1974. 7 Private Accreditation and Public Eligibi~j~y by Harold Orlans, Norma Jean Levin, Elizabeth Bauer, and George Arnstein, is the result of a study at the Brookings Institution and the National Academy for Public Administration under a contract with the U.S. Office of Education. This report will be published in abbreviated form by Lexington Books in May 1975. The full, two-volume version (October 1974) is available through the ERIC system, microfiche or printout. A limited number of multilithed copies are available through the National Academy for Public Administration. 8 Speech by Virginia Knauer, Special Assistant to the President for Consumer Affairs, at the Second National Conference on Consumer Protection in Postsecondary Education, November 14, 1974, Knoxville, Tennessee. 9 A Federal Strategy Report for Protection of the Consumer of Education, Federal Interagency Committee on Education, Subcommittee on Educational Consumer Protection, September 18, 1974. 10 ç9~~'essional Record, Washington, D.C., Thursday, April 4, 1974, reprinted from Boston ~jj~g Globe, March 25, 1974 et seq. 11 Eric Wentworth, `The Knowledge Hustlers," The Washington Post, June 23-28, 1974. PAGENO="0119" 2739 - 26 - 12 George Arnstein, "Ph.D., Anyone?" American Education, Volume 10, Number 6, July 1974; "Bad Apples in Academe," American Education, Volume 10, Number 7, August/September 1974. 13 Stanley M. Elam, Editor, "Nova, as in Innovate;" Morland, Richard B. "The External Doctorate in Education: Blessing or Blasphemy?" Phi Delta pp~~i, Volume 55, Number 3, November 1973; Also, Arnstein, George, "Accreditation, State Licensing and Approvals: Why is the System Not Working?" Volume 56, Number 6, February 1975. 14 Hearings before a Subcommittee of the House Committee on Government Operations, July 16, 17, 24, and 25, 1974; "Reducing Abuses in Proprietary Vocational Education," a report by the House Committee on Government Operations, December 30, 1974. 15 Testimony before the Special Subcommittee on Education of the House Committee on Education and Labor, July 25, 1974. 16 Hearings held September 11 and 12, 1974. 17 Ineligible under the G.I. Bill of Rights since 1952 when Congress rewrote the law and eliminated many abuses. 18 "Most Veterans Not Completing Correspondence Courses -- More Guidance Needed from the Veterans Administration," Report of the Comptroller General of the United States No. B-ll4859, March 22, 1972, p.9. 19 Federal Trade Commission, Consumer Bulletin No. 13, U.S. Government Printing Office: 1973, p.9. 20 Peter Muirhead, Deputy Commissioner for Postsecondary Education, on July 17, 1974, testified before the Special Subcommittee of the House Committee on Government Operations regarding difficulties in determination of eligibility: "The objectives of some of the accrediting organizations occasionally are not targeted fully on broader public or social goals. Under present regulations, there often is nothing that can be done when such unfavorable impact occurs...." (p.20) 21 Cf.. the socalled Newman Report, Report of Higher Education, U.S. Department of Health, Education, and Welfare, Washington, D.C.: 1971; and Private Accreditation and Public Eligibility, by Harold Orlans et al. 22 38 USC, 1775. 23 For details, cf. Educational Assistance to Veterans: A Comparative Study of Three 6.1. Bills, Princeton: Educational Testing Service, September 1973. Reprinted by the Veterans Affairs Committees as Senate Committee Print No. 18, and House Committee Print No. 81, Sept. 1973. PAGENO="0120" 2740 - 27 - 24 The Report of the National Invitational Conference on Consumer Protection in Postsecondary Education, Report No. 53, (Denver, Colorado: Education Commission of the States), June 1974. 25 The Report of the Second National Invitational Conference on Consumer Protection in Postsecondary Education is being edited by the Education Commission of the St~tes (Pending, 1975). 26 Testimony, June 4, 1974, before the Senate Subcommittee on Appropriations for FY 1975, presented by Edward T. York, Acting Deputy Commissioner for Management. The quotation is from Peter Muirhead, Deputy Commissioner for Postsecondary Education, pp. 2755 ff. Hearin~, Part 4, 93rd Congress, Second Session. 27 Murphy, Jerome. Report to USOE, Grease the Squeaky Wheel, (Lexington: 1974). PAGENO="0121" 2741 TOWARD A FEDERAL STRATEGY FOR PROTECTION OF THE CONSUMER OF EDUCATION Federal Interagency Committee on Education JULY 1975 PAGENO="0122" 2742 THE FEDERAL INTERAGENCY COMMITTEE ON EDUCATION Toward A Federal Straj~y For Protection Of The Consumer of Education Report of the Subcommittee on Educational Consumer Protection JULY 1975 U.S. Department of Health, Education and Welfare Off ice of the Assistant Secretary for Education Washington, D~C. PAGENO="0123" 2743 Federal Interagency Committee on Education Subcomittee on Educational Consumer Protection John R. Proffitt, Chalrman* Office of Education Bureau of Indian Affairs ~Tizabeth Holmgren Civil Service Comission ~dward F. Pinney ~partment of Defense Leon McGaughey Department of Health, Education and Welfare Office of the Assistant Secretary for Education *paul Shapiro office of the Assistant Secretary for Human Development Edward I. Farley,JF Office of Consumer Affairs *Sandra Willett. Office of Education Marion Craft Lenora Mallory Howard A. Matthews *Ronald S. Pugsley Health Resources Administration Joseph Kadish De~partment of Housing and Urban Development Melvin Wachs Department of Justice Carl Hamm Department of Labor Howard Rosen D~partment of Transportation *Mervln K. Strickler Federal Trade Commission Robert Belair Richard C. Foster *Steven D. Newburg-Rinn Herb Ressing General Services Administration Wary Arsenoff National Science Foundation Lyle W. Phillips Postal Service Al Reston Veterans Administration H.i~iàn Wolowitz *Members of the Steering Group II PAGENO="0124" 2744 TABLE OF CONTENTS Page No. FICE Subcommittee on Educational Consumer Protection ii Foreword iv Summary and Major Recommendations Chapter I - Background, Purpose of the Report and AiIocabul ary of Terms 8 ~~jI - Federal Responsibilities 17 Chapter III - Role of Non-Federal Agencies 35 Chapter IV - Issues and Implications 40 Chapter V - Recommended Principles and Action Steps-- Federal Strategy 48 APPENDIX I Members, Federal Interagency Committee on Education 59 II Variations of Eligibility Postsecondary Vocational Schools 1971 (Table) 60 III Variations of Eligibility Higher Education 1972 (Table) 61 IV Draft suggestions by the FICE Subcommittee on Educational Consumer Protection for Educational Complaint Guides 62 *111 PAGENO="0125" 2745 Foreword The educational activities of Federal agencies tend to be fragmented because of the decentralized nature of American education. With a view toward achieving better coordination and providing advice to the Secretary of Health, Education, and Welfare concerning educational policy and procedures, the Federal Interagency Conii~ittee on Education was created by Executive order in 1964. The Committee has been in operation since that time; the Presidential order was reissued as Executive Order No. 11761 on January 17, 1974. Chaired by the HEW Assistant Secretary for Education, Virginia V. Trotter, FICE represents the 30 major Federal agencies and departments administering educational support programs. (See Appendix I for list of FICE members.) Its operational organs consist of 11 subcommittees devoted to critical educational issues. One of the most important of these is the Subcommittee on Educational Consumer Protection. Created in 1972, to improve coordination among agencies, and to study the major problems and issues confronting the educational consumer (defined as the student), the Subcommittee is chaired by John R. Proffitt, Director of the Accreditation and Institutional Eligibility Staff in the United States Office of Education. Sixteen Federal agencies are represented on the Subcommittee. Initial activities of the Subcommittee included a review of the efforts of Federal agencies in the emerging field of educational consumer protection with a view toward improving coordination. They lv PAGENO="0126" 2746 also included the building of linkages with non-Federal organizations. One of the most successful of these was the support of efforts of the Education Commission of the States (ECS) which had created a task force in 1973 to draft model State Legislation fOr use in regulating postsecondary educational institutions. The Subcommittee was also successful in obtaining multi-agency support for two invitational conferences on educational consumer protection organized by the Education Commission of the States and held in Denver, Colorado, during March 1974, and Knoxville, Tennessee, in November 1974. The model State legislation, as well as other aspects of protection for the educational consumer, were deliberated by representatives of Federal and State agencies, academic institutions, student and consumer groups and others concerned with educational consumer protection. Proceedings and recommendations from both conferences were published by ECS and distributed widely. As a direct result of the report of FICE on the recommendations of the Denver conference, the Subcommittee was charged by FICE to prepare a strategy paper dealing with the Feder~al role in educational consumer protection. This report, Toward A Federal Strategy for Protection of the Consumer of Education represents the findings and recommendations of the Subcommittee. The Initial draft of the report was prepared under contract by Mr. George Arnstein with the assistance of Ms. Kim Krekel. A small steering group of the Subcommittee refined the draft and V PAGENO="0127" 2747 prepared the recommendations. Ms. Alison Kirkpatrick of the AlE Staff, USOE, served as staff assistant to the Subcommittee. The report was typed by Ms. Mary Cox of the FICE staff. In addition to an executive summary and recommendations, the report includes a statement of purpose, a review of Federal responsibilities in protecting the. consumer of education, and analysis of the issues and implications of improving protection for educational consumer, and some recommended principles and action steps recommended for adoption by Federal agencies. Bernard Michael Executive Director Federal Interagency Committee on Education July 1975 vi PAGENO="0128" 2748 TOWARD A FEDERAL STRATEGY FOR PROTECTION OF THE CONSUMER OF EDUCATION Summary and Major Recommendations Chapter I cites major consumer abuses, discusses their effect, and outlines the type of Federal actions considered by the Sub- committee. It also offers a helpful definition of terms such as "licensing," "accreditation," and "eligibility," which are too often confused and used interchangeably. Chapter II outlines current Federal efforts to protect the educational consumer, and moves briefly through the positive aspects and shortcomings of several major agencies. The general picture shows that Federal efforts in protecting the student consumer are under way, but have yet to achieve a fully developed thrust. Policies are largely reactive. Information provided to the student is inadequate. Safeguards against outright fraud and simple abuse are weak. Few agencies have systematic procedures for handling complaints from students and parents, or for redressing valid claims. Coordination between Federal agencies is at an embryonic stage, and the educational community itself has not activated consumer protection concepts or mechanisms where consumer problems exist. ~mong the Federal departments and agencies, the response to educational consumer problems varies considerably. Chapter III focuses upon the current roles of the States, accrediting agencies, and consumer agencies. It notes the importance of, and positive developments in, effective State licensing activities. PAGENO="0129" 2749 It cites the central role of the voluntary, private accrediting bodies to create consensus on norms and standards, and to help set State and Federal standards. It cites potential resources for the protection of educational consumers that will have to be employed if linkages between educational agencies and consumer organizations are to be strengthened. Chapter IV poses several questions: 1. What should be the Federal effort in protecting educational consumers? The discussion outlines the existing tension between the deep-rooted opposition to Federal intervention in educational administration versus the obvious responsibility of Federal officers to reduce exploitation of Federal programs and their beneficiaries. 2. Who is to provide Federal leadership? The subsection underlines the need for greater Federal coordination and for aggressive and coordinated Federal leadership. 3. How should the Federal "delivery system" respond to consumers and how should it handle complaints at the Federal level? Students with educational consumer complaints have no organized andpublicized redress mechanisms. 78-226 0 - 77 - 9 (Pt. 4) PAGENO="0130" 2750 3 4. What is the proper role of the accrediting agencies? There is heavy reliance by the Federal government *on accrediting agencies and associations to assure quality. If the accrediting process is an indicator of quality, we need to better comprehend the limitations and assets of this process as it relates to protecting the educational consumer. 5. What is the proper role of the States? We now rely on the States to provide minimum compliance with approved standards. The question is whether the responsibilities of the States can and should be strengthened so that their criteria can become more meaningful indicators of quality. Recommendations Chapter V lays down four major principles and accompanying action steps as the foundation for a proposed Federal strategy in behalf of educational consumers. The principles are stated below. Outlined with them are the more significant action steps which attend each principle. Principle I: The student is the primary consumer of educational services. As a result of educational inexperience coupled with the expensive and intangible nature of the services he is purchasing, and in light of the potential for consumer abuse in PAGENO="0131" 2751 4 `future service contracts used by most schools, the educational consumer not only has responsibilities, but also has important `consumer rights." When these rights are not respected, the student should be protected and should have redress mechanisms available to him. Where he has responsibilities, he must be fully informed of, and held accountable for, these responsibilities. ~jor Actions Reconinended Students who apply for Federal program benefits should be given an informative statement of their rights and their responsibilities. The statement should be stated clearly and in readable type; it should be made part of the application so that the student will have direct exposure to it. Federal agencies should relinquish any rights they may have as "a holder in due course" of student loan obligations if a student has established a legitimate claim of unfair or misleading practices. In such instances, the government should proceed against the school to recover all sums paid out, for example, under the Guaranteed Student Loan Program. Principle II: Consumer concepts, legislation and mechanisms should be activated in the PAGENO="0132" 2752 c educational marketplace as is now occurri ng i n the tradi ti onal marketplace. ~~jpr Actions Reconinej~4 * A Federal Student Tuition Insurance Corporation should be created to protect students and their tuitions when postsecondary schools close. * There should be a central mechanism on educational consumer complaints that would handle consumer complaints. Such a center would either resolve complaints directly or refer and follow up on them. It would also serve as an informal research instrument and an `early warning system' against educational abuses. Principle III: When the Federal Government disburses funds to support educational institutions, programs and students, it must assume responsibility for the way those funds affect the educational consumer as well as educational and program objectives. ~j~pr Actions Recomende4 * Institutional eligibility for Federal funds for occupational or vocational schools should be contingent upon: a. disclosure of student dropout and course compl~tioI~ rates. and in the event that PAGENO="0133" 2753 an organization or school publicly advertises job-related claims, it must disclose job- placement rates. b. achievement of occupational objectives through placement of graduates in the positions for which they sought training. c. a pro-rata tuition refund policy. Principle IV: State educational agencies and private associations or agencies which have direct responsibility for accrediting, approving, licensing and certifying educational i nsti tuti ons and students, should do so with issues of consumer protection clearly in mind. The over- all effort to protect the educational consumer must involve consumer agencies and organizations, both public and private, in a vital way. Major Actions Recommended FICE should encourage ECS, the National Association of State Administrators and Supervisors of Private Schools and other State and local-oriented organizations to provide assistance to those States which do not possess approval legislation, or which are interested PAGENO="0134" 2754 7 in streamlining the existing legislation. The purpose of this assistance should be the adoption by States of legislation at least as strong and pro-consumer as the Model Legislation developed by ECS. Federal assistance and guidance should be provided under appropriate guidelines to State, private agencies and consumer organizations for the purpose of developing greater competence in systems analysis and design, improving the educational evaluative process, and encouraging the exchange of information between organizations concerned with consumer protection and education. Any such assistance should be for developmental ratherthan operational purposes. PAGENO="0135" 2755 8 Ch~pter I Background, Purppse of the Report and A Vocabulary of Terms Background The `age of consumerism" has coincided with the emergence of education as a business. Education has been sold to consumers who are seldom recognized as such. Laws typically refer to the educational consumer as a "student," as a "beneficiary" (under the G.I. Bill), as a "dependent," and so on. Students are educational consumers. They invest time, energy and money in the pursuit of programs of self-improvement, with or without direct faculty supervision, in formal or informal setting, with vocational as well as avocational objectives. In recent years there has been growth not only in number of students, but also in Federal programs which provide for student financial sup~orE Fede~al agencies have become increasingly aware of the abuses of educational consumers resulting from unethical operations of some educational institutions. In postsecondary education, a number of common malpractices have been identified. They are found in public, private nonprofit, and proprietary institutions. These malpractices include: (1) misleading and inaccurate advertising, (2) indiscriminate and overly aggressive recruiting, (3) lack~ of full disclosure of salient institutional, characteristics useful to the consumer, such as its history, financial policies, academic standards, and other relevant: information, PAGENO="0136" 2756. 9 (4) inferior facilities, course offerings, staff, (5) false promises of job placement, and (6) insufficient refund policies (or failure to live up to stated policies). One example of consumer (student) abuse is that of salesmen who represent a school for computer technicians in New Mexico who solicited Indians to enroll in courses and promised them careers as highly-paid computer programers. Potential students borrowed thousands of dollars in Federally insured student loans through the same company that offered the courses, never saw the money, and were academically out of their field at the first class meeting primarily because of their inadequate background in mathematics. The school offered no refunds, but charged interest on the loans which no longer received Federal subsidy. When Federal educational programs, such as the Federally insured student loan program, are abused through malpractice, there are four major results: (1) Students who are to be the beneficiaries of the programs do not get the full benefits intended; they often lose out instead. (2) The Nation, which seeks to develop its human talent, is not getting an adequate return for public funds expended. (3) Federal officials, who have a responsibility to safeguard public funds, find their efforts undermined by those who distort the system through unethical and questionable practices, whether by administrators, students, or fi nanci al managers. PAGENO="0137" 2757 10 (4) All forms of fraud, abuse, or diversion of funds, tend to undermine the integrity of American society and should be combatted. (5) High student dropout rates and subsequent loan defaults. Purpose of the Report The purpose of this report is to initiate formulation of a Federal strategy for consumer protection that works in conjunction with efforts of the States, localities, consumer groups, and other private organizations. This report will describe the responsibilities of Federal agencies in postsecondary education as they deal with educational consumer protection, examine the status of Federal. programs and efforts to improve them, and discuss the issues and implications involved. The thrust of the report is the recommendation of actions which are designed to prevent abuses of the educational consumer and misuse of educational programs. The strategy for Federal action, which is at the heart of the present report, emphasizes: (1) steps to be taken by Federal agencies to help insure students' rights in the marketplace; (2) steps to be taken by Federal agencies, singly or jointly, to ~~y~nt or protect ag~ainst abuses of educational consumers; (3) measures to be taken by various Federal agencies which arise out of their ftarticular ponsibi]j~ as funding, or guaranteeing agencies; an~[ (4) efforts to be made by Federal agencies to stren~~ activi ties of State and py'ivate ~g~ncies dealing wJth postsecóhd~a,ry T~i?tTti~ffons a~d~their consumers. PAGENO="0138" 11 Above all, these actions should provide incentives for all schools and colleges to maintain their integrity and, where appropriate, to improve their performance. The task is iniiiensely difficult because !wierican education is diverse and decentralized to the point where it is difficult to ascertain the numbers of postsecondary schools in the United States. (See Chart A, Appendix II, for illustration of vocational and technical schools, and Chart B, Appendix III, for colleges and universities.) Following are several commonly reported abuses of students by educational institutions: (1) The delivery of programs of instruction which are different from those which both the student and the student funding organization were led to expect. (2) The use of educational funding programs for meretricious rather than educational purposes, whether through meaningless enrollment, non- attendance, default or misleading applications (e.g., use of insured loans to induce students to enroll and borrow money which is then diverted either by students or others). (3) The award of certificates, degrees, or diplomas based on payment of fees rather than on educational accomplishment; the enrollment of foreign students for the purposes of securing residency permits and other noneducational benefits. (4) The claim to hold a degree, certificate, or diploma which has no standing or whose name is misleading or whose standards are known to be clearly or deliberately inferior to those in common use in the United States (degree mills, diploma mills). For purposes of this paper, we are concerned primarily with (1) and (2). PAGENO="0139" 2759 12 The Subcomittee wishes to acknowledge the fact that millions of Americans have received highly satisfactory educational benefits from the Nation's diverse universe of public and private post- secondary schools. It could well be that because of the satisfaction which many persons have experienced, the inequities and abuses which may be observed sometimes in postsecondary education have been obscured. This report focuses upon those inequities and abuses, and recormiends some approaches for dealing with them. A Vocabulary of Terms Every school exists by permission of the State although some states fail to insist on the issuance of a license, permitting instead an individual or institution to operate without a license, sometimes as a profit or nonprofit incorporated or chartered institution. State licensing laws normally call for the observance of minimum standards, may authorize the awarding of degrees or regulate the use of titles, and may even restrict the use of such words as "college" or `academy." There are few examples of Federal licensing although radio operators and pilots, for example, hold Federal licenses and some nonprofit educational associations (The National Education Association is one) are chartered by the Congress. The best known exception is the Federal Aviation Administration which licenses flight schools. Accreditation normally means that a school voluntarily has applied to an agency or organization for evaluation and recognition for meeting certain established standards. It is important to PAGENO="0140" 2760 13 distinguish between regional accreditation, which looks at entire institutions, and !p~cialized accreditation, which deals with certain departments, specialties or segments within an institution. It also is important to ask about the standing of the accrediting agencies because they differ among themselves. (a) Some States accredit schools or colleges (Maryland, Indiana, and New York are examples), an action which is more nearly akin to licensing. (b) More than 60 accrediting agencies are recognized by the U.S. Commissioner of Education who is charged in several Federal laws with maintaining a list of those accrediting agencies which he has determined to be reliable authorities on the quality of training offered by an institution. (c) There is a similar list (but not identical) of accrediting agencies which are recognized by the National Commission on Accrediting, an organization which is supported by most segments of the educational community but has no legal standing for most Federal programs. (d) There have been instances of recognition by self- appointed so-called accrediting bodies, seeking to give plausibility to low-caliber educational institutions, including some diploma mills. State officials have been successful in some efforts to ban or enjoin this type of `recognition." Accreditation is usually conferred for a specified period of years, then is subject to renewal. Few accrediting bodies use probation; instead they use such phrasing as "renewed with stipulation" or other conditions which must be remedied before accreditation is renewed. Probation may or may not be public; it seldom is publicized and consumers are slow to learn of those cases where it has been imposed, or where accreditation has been revoiçed. The stipulations of conditions, since they. are presumed to be PAGENO="0141" 2761 temporary, are normally considered confidential although they may be disclosed by officials of the school concerned. In suninary, accreditation is voluntary, private, and often used as an indicator of quality and reliability by State and Federal officials, and by others. Certification normally is used by nongovernmental bodies to grant recognition to an individual for having met specified criteria. It is also used by governmental bodies and applied to institutions such as the FAA certificates of airworthiness. Teachers in most States must have a license to teach; the process is known as certification, credentialing, or licensing. Some States insist that educational salesmen be licensed by the State and/or bonded by an approved bonding company. ~pproval is conferred by the State Approving Agencies, designated by the governor but funded by the Veterans Administration under contract to make sure that courses meet specified criteria before they can be ~pproved for veterans benefits. (For foreign schools, the VA approves courses directly after consulting other sources-- including the Department of State and its consular service, and sometimes the U.S. Office of Education.) Eligibility (for educational purposes) has two major aspects: Student eligibility deals with such criteria as are imposed by each program. For example, for veterans PAGENO="0142" 2762 15 benefits, an eligible student must meet criteria specified in Chapter 38 of the U.S. Code. For the Basic Opportunity Grants Program, there are limitations on income as spelled out in OE regulations. Institutional eligf~ility deals with the requirements of various programs as to which schools may participate or what makes a school eligible so that its enrolled students will become beneficiaries. A veteran entitled to student benefits, for example, can use them only if he attends an eligible course, i.e., one which is approved by the State Approving Agency. Similarly, a foreigner planning to study in the U.S. will be issued a student visa if he meets various personal criteria and if an eligible school (as determined by INS) certifies that it accepts him. Most forms of institutional eligibility derive from accreditation. Control falls under three categories. Some Federal programs are confined to public institutions, others are confined to accredited schools, and still others encompass proprietary schools. Public institutions usually are open to all, are operated and controlled by a publicly elected or appointing group of school officials and are supported by public funds. Pri vate-no~profit institutions are established and maintained by nongovernmental bodies under the control of a private group of officials. Many enjoy additional public support for sp~c~fic PAGENO="0143" 2763 16 programs or activities, including Federal institutional support under certain conditions of eligibility. ~ schools seek to make a profit, operate under private control, and number in the thousands (see Appendix II). Some belong to specialized accrediting bodies, some award degrees (while others merely issue certificates of completion). Many proprietary schools serve businesses and industry while others are avocational. Students receiving veterans benefits, social security payments, BEOGS, or Federally supported vocational rehabilitation may choose to attend a p~iblic institution, a privately controlled one, or a p~pj~rietary school subject to the known and published criteria of institutional eligibility. PAGENO="0144" 2764 17 Chapter II ~a1R~QQfl!ibilifle5 The Latin wording of caveat e~p~ expresses the historic concept that the consumer is expected to fend for himself, something he could do on a more reliable basis in the days of relatively stable coniiiunitieS, face-to-face business transactions between principals, and the more personal accountability of neighbors and fellow citizens. State and Federal efforts to protect the consumer in the United States have increased in recent decades. In 1964, a Special Assistant to the President for Consumer Affairs was established; concurrently, there was an increase of consumer agencies and representatives at State and municipal levels. Legi~lative efforts have been aimed primarily at inducing full disclosure, arid at regulating the financial aspects of transactions. Recently, there have been Federal laws to stimulate Truth in Lending (with full disclosure of interest rates and finance charges) and pending legislation to establish a Federal consumer protection agency. Similarly, Congress authorized the U.S. National Commission on Consumer Finance which issued a report on Consumer Credit in the U.S. (1972) that recognized the inequities of the Holder in Due Course (HIDC) doctrine which is one of the persistent points of friction in school and other lending transactions. PAGENO="0145" 2765 18 HIDC maintains that when a purchaser signs a note as payment or partial payment--perhaps for a car or for tuition--the financing institution holding the note is the HIDC and entitled to receive payment even if the car is defective, or never delivered, or is delivered but not as represented at the time of sale. This mechanism leaves the student with a loan payable for an education that may not be delivered. A bill to counteract the HIDC doctrine is being drafted under the sponsorship of Rep. Lenore K. Sullivan, (Mo.); it seeks to protect the consumer so that he is not liable for services or articles purchased but not rendered. It was this type of difficulty at Riverside University in California which caused Representatives Alphonzo Bell and Jerry Pettis to introduce their bill, HR 11927, calling for more stringent standards for eligibility for Federal funding. They were distressed that residents of their districts, students at Riverside University, were left with Federally insured student loans, now payable, for which the college had not delivered the promised services. Several Congressional coninittees have become aware of the student as a consumer. In the House, Representative Floyd Hicks' Special Studies Subcommittee of the Committee on Government Operations heard educators, scholars, and representatives of various Federal agencies testify as to the plight of postsecondary educational consumers, as did Representative James OHara's Special Subcommittee on Education. In the Senate, SenatorVance Hartke's Committee on 78-226 0 - 77 - 10 (Pt. 4) PAGENO="0146" 2766 19 Veterans Affairs listened to similar testimonies. Senator Pell conducted hearings during September 1974. While members of Congress are studying the issue of educational consumer protection, awareness of the general public has been initiated through recent articles in the Boston G11 Washij~g~q~ Pmerican Education,3 and Reader's Digest.4 However, substantive action regarding the educational consumer exists primarily at the agency level, where awareness varies and policies are largely reactive. Individual agencies do not have enough power to remedy a system with loopholes which permit school administrators to operate illicitly. Few agencies have avenues of redress for disillusioned educational consumers; students often do not know where to direct their complaints, which often are shelved because no single agency has a comprehensive mandate. Complaints represent only one segment of students victimized by rnalpracticeS. Others do not think to complain; others view both the Federal government and State with hostility for their implicit or explicit endorsement of schools `approved for veterans and for loan programs that got them into debt in the first place. With 1"Spotlight on Vocational Education," The Boston Globe, March 25, 1974. 2Eric Wentworth, "The Knowledge Hustlers,' The Washington Post, June 23-28, 1974. 3George E. Arnstein, "Ph.D. Anyone?" American Education, July 1974; "Bad Apples in Academe" August-September, 1974. 4Jean Carper, "Career Schools Aren't Always What They Appear to Be," Reader's Digest, June 1974. PAGENO="0147" 2767 20 increasing awareness of the students dilenina, policies to assist him or her--and to make the educational consumer aware of the practices that exist and of recourse available through Federal agencies--are slowly being developed. An overview of agency policies indicates how much is being done for the consumer of education now. What are the Federal a~en~~d~1n? As noted, consumer protection is a relatively recent development, juxtaposed to the more historic concept of letting the buyer look out for himself. The activities of Federal agencies tend to be uneven because education, historically a primarily nonprofit field, has surfaced only recently as an area where consumers need a greater measure of protection. Few agencies have established consumer protection for students. Most lack master or central files for complaints, analysis of complaints, outcome feedback regarding educational consumer protection, and standard grievance procedures for students with educational problems. The listing of agency policies which follows is illustrative rather than exhaustive, based on interviews, telephone calls, and other sources. Pepa~r~tofalt,~ciucation and Welfare Office of Consumer Affairs The Office of Consumer Affairs COCA) maintains contact with private consumer organizations andacts as a liaison between them and the PAGENO="0148" 2768 21 Federal agencies responsible for educational consumer protection. OCA co-organized the two conferences on educational consumer protection and co-authored this report. Office of Consumer Affairs handles a small but increasing number of complaints and publicizes consumer problems in the educational sector. OCA basically rromotes educational consumer protection from within the Federal and State governmental structure, and advocates "self-help" mechanisms within the private sector. Because its director is also Special Assistant to the President for Consumer Affairs, OCA promotes educational consumer protection at the White House level. Office of Education The main focus of OE activities relative to this subject is in the Accreditation and Institutional Eligibility Staff (AlES), the Office of Guaranteed Student Loans, the Office of Student Assistance, and to some extent, the Division of International Education which renders advice to the AlES as to the value and comparability of foreign degrees and courses. In addition, it is anticipated that the new Basic Educational Opportunity Grant program will become a major area for concern regarding protection of the student. Since many decisions about eligibility of schools, as made by various Federal and other agencies, derive from the actions of the U.S. Commissioner of Education, the role of the AlE Staff in OE is central. It took an active part in the ECS Task Force, the Denver PAGENO="0149" 2769 22 meeting, and in planning follow-up activities. Its decisions determine which schools are listed in the various OE directories of schools (and with what kind of annotation as to eligibility or accreditation). Its recommendations heavily influence the Commissioner of Immigration and Naturalization, various State agencies for teacher certification (and other purposes), but only on a voluntary and consultative basis. Protection of the educational consumer is promoted through the following AlES activities: (1) Recognition of State approval and private accrediting bodies. This function of serving the mandate to the Commissioner of Education, of determining which State and accrediting agencies provide assurance of educational quality, determines the actions of numerous other State, Federal, and private bodies which rely on the Corrinissioner's recognition and determination whether a school is to be eligible for certain programs or not. Criteria for recognizing State approval bodies and private accrediting agencies have been published and are under periodic review. Currently, the Commissioner recognizes 62 accrediting agencies, 8 State approval agencies, and 8 State boards of nursing. (2) Recommendations to the Administration and the Congress on legislative changes regarding institutional or program eligibility for Federal funds, PAGENO="0150" 2770 23 (3) Review and processing of complaints regarding "eligible institutions," recogni zed accredi ti ng or approval bodies, and violations of student and institutional assistance program regulations. During the period 1969- 1974, the AlE staff processed over 500 complaints pertaining to proprietary schools. (4) Determination of institutional eligibility for OE assistance programs such as the Guaranteed Student Loan Program. Over 8000 institutions are recorded in the AlES master file. Health Resources Administration, Bureau of Health i~iources DiTopment The Bureau of Health Resources Development (BHRD) serves as the principal focus within the Department of Health, Education and Welfare for programs concerned with development and utilization of health manpower. The BHRD engages in health manpower education programs in the fields of medicine, nursing, public health, and allied health professions and occupations. Within BHRD, the Division of Associated Health Programs serves as the Federal focus for public health and allied health professions with respect to education, practice, and manpower research; it supports and conducts programs with respect to the need for and development, use, credentialing, and distribution of such personnel. Liaison is carried out with other Federal and non-Federal programs having a common interest in improving the nations ôapacity to PAGENO="0151" 2771 24 deliver health services. Most health manpower education legislation expired at the close of Fiscal Year 1974. There are a number of health manpower bills currently before the Congress. Eligible applicants for legislatively mandated programs in the past have been public and private nonprofit junior colleges, colleges and universities, nonprofit agencies, organizations and institutions. Directories of allied health programs in both junior and senior colleges are compiled periodically. No consumer protection literature has been produced in the Bureau or Division. The Division of Allied Health Professions co-sponsored the ECS Conference on Consumer Protection in March 1974. Social Security Administration The Social Security Administration is the second largest Federal source of student financial aid. In FY 1974, it distributed almost $700 million to 600,000 students who were eligible beneficiaries. Schools which qualify include: *publicly supported schools and colleges *Private schools or colleges which are approved by a State or accredited by a State-recognized or nationally recognized accrediting agency. This "includes State approval for veterans benefits. *Unaccredited private schools if at least three accredited schools or colleges accept their credits on transfer on the same basis as credits transferred from an accredited school. PAGENO="0152" 2772 25 SSA uses broader criteria for institutional eligibility than any other Federal agency, has no field staff of its own (for this educational purpose), receives few complaints, and occasionally refers questions about proprietary schools to the Federal Trade Comission. SSA informs beneficiaries about the institutional eligibility of a school (and relies heavily on the Educat1~~ Directorj' published by OE) but provides no further guidance. p~partment of Defep~ Issues of major concern to DOD are accreditation of correspondence schools since 80% of all in-service G.I. benefits go for correspondence study, according to a study by the Government Accounting Office (Report No. B-ll4859, March 1972). The DOD is aware of illicit solicitation practices, misrepresentations, ease of entry and poor completion rates in various schools. DOD has attempted to decrease chances of misrepresentations, problems of recruitment, and general misuse of Federal funds. It co-sponsored the Denver ECS meeting, and has a four-point program: (1) To enhance consumer safeguards through efforts to strengthen the G.I. Bill; (2) To support the FTC in its consumer edii~ation campaign; (3) Reform through its own education officers and personnel officers who control the flow of people and the conduct of business on military bases; and (4) Publication of its Information Guidance Series. Department of Housing and Urban Deve1op~~ Under the Model Cities program, HUD has a special concern for exploitation of inner city residents, including their educational PAGENO="0153" 2773 26 programs. It is concerned with trade schools which have unfair training costs, unreliable tuition refunds, inadequate job placement, and misrepresentation of transferability of credit. HUD is supportive of actions to be taken by FICE or individual agencies to assist the educational consumer, but has taken no steps of its own to alleviate problems in this area. D~partment of the Interior Bureiiöf Indian Affairs The Bureau of Indian Affairs recognizes specific problems in the handling of Indian student funds through Educational Opportunity grants and other specially funded USOE-BIA programs. However, all complaints are channeled to local Agency offices or one of the 12 BIA Offices. There are no standard policies for handling grievances, and no central record file of them. BIA was a co-sponsor of the Denver Conference in March 1974. D~partment of Justice Law Enforcement Assistance Administration The LEAA funds over 1,000 schools through a number of student programs. It attempts to avoid questionable schools (I) by insisting that the students in their programs attend accredite~i institutions, and (2) by specifying that 80% of the credits (taken through LEAA) in a two-year program be transferable to a 4-year institution. Next year the requirement will be stiffened: ahigher percentage of the credits must transfer, thus increasing the emphasis on nonprofit hig1i&~ education. PAGENO="0154" 2774 27 Immigration and Naturalization Service For a foreign student to receive a U~S. student visa, he must be accepted by an eligible school. Eligibility is determined by the Immigration and Naturalization Service of the U.S. Department of Justice, with heavy reliance on the publications and listings of the Accreditation and Institutional Eligibility Staff of the U.S. Office of Education. It is not uncommon for an eligible school to advertise itself as "recognized by the U.S. Department of Justice" which is stretching the truth. INS has designed a system to eliminate the notion of "approval" by making schools apply for eligibility. Form 1-17, the petition for approval, says: If the school is approved, THE PETITIONER AGREES: That in any advertisement, catalog, brochure, pamphlet, literature, or other materials hereafter printed or reprinted by or for this school... shall be limited solely to the following: "This school is authorized under Federal law to enroll non-immigrant alien students." Since INS does not operate a domestic educational enforcement system, schools seem to suffer no penalties if they violate the promise. However, Form 1-17, below the signature, carries a notation that "If the agreement is not complied with, approval may be withdrawn." Department of Labor The Department of Labor places workers in appropriate jobs after they have been trained. However, the selection of institutions in which training is~provided is determined by HEW, which approves and recommends various institutions through the Office of Education. PAGENO="0155" 2775 28 Since the Manpower program relied on OE judgment for selection of training institutions, independent action for protection of the trainees was not deemed necessary. The DOL publication, Occupational Outlook Handbook, and the reprints from this biennial reference work, are valuable career planning guides which have been exploited by some unscrupulous managers and salesmen for schools. Where the Handbook may forecast demand in a certain occupation--computer programers used to be an example--certain schools have used the information to persuade potential students that this meant an assured job placement for them. DOL co-sponsored the ECS meeting in Denver. ~p~rtment of Transportation Federal~viation AdmijTstration FAA interests cover every aspect of aviation education, including safety, competency of aviation machines, mechanics, and crews. Through a prescribed certification process governed by Federal AvIation Regulations, FAA approves nearly 3000 pilot/flight schools for technicians, and 150 aviation maintenance technician schools. Protection of the consumer of aviation education is promoted through the following FAA program. (1) Air worthiness: inspecting, approving, licensing aircraft and all their components utilized during instruction. (2) Prescription of aviation training via detailed curricula, including clock hours, cited in Federal Aviation Regulations for pilots/air-crew, mechanics, controllers, and technicians, PAGENO="0156" 2776 29 (3) Individual certification of competency of aviation professionals, as well as all air carrier and general aviation pilots. (4) The Agency is specifically charged not only with safety-competency activities, but its functions also include those of serving as advocate and promoter of aviation industry and activities. A noteworthy aspect of FAA educational functions is that it is the only Federal agency which directly licenses and approves public and privately owned schools. This Federal license deals with the quality of instruction but not with the recruiting practices or similar aspects of the schools. Thus for a school to offer courses eligible for veterans benefits, it must turn to the State Approving agency for such eligibility. The FAA has recently included in its regulations a restriction against flight schools advertising courses that are not offered. Federal Communications Comission Since the FCC has no mandate in its law, it has no active program or materials on consumer protection in education. The FCC does not certify schools or provide advice on schools other than to provide Information sources or occasional referrals to other agencies. Federal Trade Commission The Federal Trade Commission has been answering consumer complaints for several years. It established a 5-point program to accommodate the consumers of vocational education. PAGENO="0157" 2777 30 (I) "Guidelines for Private Vocational and Home Study Schools" is an attempt to let the vocational school industry know what practices in the industry are deceptive and unfair. (2) Consumer Education Campaign is a multi-media affair which began in 1973 to inform consumers of the industry and its problem areas. (3) Litigation work includes investigation of complaints issued by FTC against 25 schools since 1970. (4) Federal/State Cooperation and Coordination is a plan for bridging the information gap between States and Federal agencies, and has involved a general exchange of ideas concerning standards for proprietary schools. FTC participated in the Denver ECS conference. (5) On August 15, 1974, the Commission proposed a binding trade regulation rule having the force of law.* The rule would require that prospective students be provided with information which may aid them in making an informed and intelligent decision whether or not to enroll in a school. The proposed rule contains a pro rata tui- tion refund provision and a ten-day cooling-off/reaffirmation provision, in addition to disclosure and advertising substantiation requirements. Fraud Branch, Postal Inspection Service, U.S. Postal Service The Postal Service has been helpful to the educational consumer through its distribution of a general guide for consumer protection, parts of which are applicable to the student. Information on *Federal Register, Vol. 39 (159), August 15, 1974, p. 29385. PAGENO="0158" 2778 31 legislation and enforcement agai~nst mail fraud has been especially helpful to the educational consumer. The Postal Service's Fraud Branch distributed a 28-page guide for consumers titled "Mail Fraud Law - Protecting: Consumers, Investors, Businessmen, Patients, Students," which contributed to the discovery of 21 home study schools involved in mail fraud. As a result, a number of illicit correspondence schools were closed. The Fraud Branch has also been instrumental in closing down some diploma mills. Veterans Administrat1~fl The V.A. operates the largest of all the Federal student financial aid programs. As of February 1974, it cost approximately 3 billion to send about 2 million veterans to school last year, including certain widows, orphans, and active-duty military personnel. The V.A. operates through 58 regional offices which handle local complaints; there is no central clearinghouse. The role of the VA Central Office is to help assure quality education for its constituents; but consistentwith the basic Federal policy of avoiding or minimizing direct Federal intervention in the operations of schools, the VA itself does not examine the quality of tnstruction offered, but leaves that to the State to review and approve. The VA supports the FTC's attempts to inform the educational consumers has distributed the FTC guidance packet on vocational schools, and is printing a comparative information packet, `US Facts," outlining correspondence school data for veterans' use. PAGENO="0159" 2779 32 The VA participated in the ECS Task Force on a Model State Law to license schools and was a co-sponsor for the ECS Denver Conference. U.S. Civil Service Commission The U.S. Civil Service Commission receives many complaints regarding activities of schools that offer correspondence courses for civil service examinations--so-called `civil service" schools. Inasmuch as the Civil Service Commission has no jurisdiction in such matters, it cooperates with the U.S. Postal Service, the Department of Justice, the Federal Trade Commission, and State Consumer Protection Agencies by referring appropriate complaints to these agencies. The Commission desires to warn the public of the misleading information given by many such schools, and has distributed a fact sheet regarding so-called "civil service" schools and their relation to Federal employment. The fact sheet emphasizes that the Commission does not support any "civil service" schools or any claims they have regarding Civil Service testing' or employment with the Federal government. Coordinating Federal Agencies Efforts--The _FICE Subconii~ittee on Educational Consumer Protection To make a beginning toward achieving better coordination of the Federal agencies concerned with various aspects of protecting the educational consumer, the FICE Subcommittee on Educational Consumer Protection was created in 1972. As one of its first efforts the Subcommittee began the study of major prOblems and issues. PAGENO="0160" 2780 33 confronting the educational consumer whom it defined as the student. Early planning sessions revealed the need for a subcommittee whose primary concerns were determination of Federal mechanisms for educational consumer protection, and legal questions concerning the authority of the Federal Government in dealing with educational problems. Also considered were the development and dissemination of information, facilitation of Federal-State cooperation and coordination, and the improvement and coordination of interagency treatment of problems related to educational consumer protection. Subcommittee efforts have produced results in several directions. (1) A Task Force of the Education Commission of the States last year produced model State legislation (Model State Legislat49~ Report No. 39, June 1973). Funding was arranged through FICE and participation included representatives from FICE, VA, OE and accrediting agencies. (2) Co-sponsorship with ECS and other Federal agencies of the National Invitational Conference on Educational Consumer Protection, held in Denver, Colorado, in March 1974, which formulated several recommendations. A second conference was held on November 14-15, 1974, in Knoxville, Tennessee. A report on this conference, including recommendations, is available from the Education Commission of the States, Denver, Colorado. (3) Consumer guidance through educational materials developed by the Federal Trade Commission pertaining to vocational schools. OE is preparing additional materials. A pamphlet explaining how the PAGENO="0161" 2781 34 victimized educational consumer may gain redress is being designed for the Subcommittee by FTC and OCA. (4) Reports concerning the consumer protection interests and activities of the various Federal agencies, such as this Federal strategy report for educational consumer protection. (5) Contribution to the rising public awareness of the need for better consumer protection. The Subcommittee encouraged preparation of additional materials, including publication of two articles on consumer protection (with several thousand reprints) by George E. Arnstein in American Education. (6) Served as a catalyst for consumer activities in various States. (7) Improved communications among Federal agencies, and between the agencies and `other groups with consumer interests. 78-226 0-77 - 11 (Pt.4) PAGENO="0162" 2782 35 Chapter III Role of Non-Federal Agencies Current role of the States The States vary greatly in their laws, their enforcement policies, their results, and in their protection of educational consumers. At least three States--Tennessee, North Carolina, and Montana--have enacted the ECS Model legislation which was endorsed by the Committee on Suggested Legislation of the Council of State Governments. Some States are hospitable to diploma mills, Others are not. Some recognize the performance of vocational/technical accrediting agencies, others do not. For higher education institutions, most States rely on regional accrediting agencies, directly or indirectly through various forms of equivalency. All of them operate one (or more) State Approving Agency to approve courses for veterans, and this activity is underwritten by the VA at an annual cost of about $10 million. State approving bodies often rely on private accrediting agencies; both play an important part in determining eligibility for Federal funds. They affect both the Federal government and the educational consumer. Criteria for Federal eligibility today derive largely from the work done by others. For example, before the Social Security administration will send out a check, the 1dependent'1 must be enrolled in a course approved by a State or private accrediting agency. The Federal reliance on State standards implies great trust in their eligibility requirements, although standards vary from State PAGENO="0163" 2783 36 to State as does enforcement of the laws that require standards. A dishonest school operator may be forced to leave one State after his malpractice is discovered, but State A typically fails to alert State B and he may set up a similar operation there. State C may know something unknown to either State; and the Federal files may contain information relevant to the State approving agency, if only the agency knew where to ask and how to get it. Lack of interstate cooperation and coordination has resulted in the following cases and more: *California is an example of good administration, where the staff in the Department of Public Instruction enforces the licensing laws and approves courses for veterans. But a loophole in its licensing law allows a college incorporated for profit or nonprofit to operate without supervision. of the State Superintendent of Public Instruction. It is under this loophole that Riverside College-Riverside University was able to Ôperate legally, prior to Its being enjoined under court order. *Florlda demonstrates the effectiveness of a new licensing laws for degree granting institutions, enacted in 1971, with increasingly diligent enforcement. A member of the Florida licensing board told the Denver Conference that certain undesirable `colleges' had left Florida and set up in other States. Prior to the new law, Florida had been a notorious haven for diploma mills. `~More general examples include home-study courses, approved by the State agency and approved for veterans benefits, relating to forest ranger education, although no State department of forestry PAGENO="0164" 2784 37 will hire a forest ranger solely on the strength of his correspondence training. *There are schools that have State licenses, that have State approval for veterans, but which treat veterans differently from non-veteran students, mostly because the combined Federal-State laws and regulations force them to set up more generous refund policies for, veterans. *In some States employees of the State Department of Education visit a school, for licensing purposes, while another team from the same State Department of Education visits the school for purposes of veterans approval, but they do not compare notes or share information derived from the visits. *Under the Education Amendments of 1972, the U.S. Commissioner of Education has been given the additional task of `recognizing" State agencies. He recognizes those which the Advisory Committee on Accreditation and Institutional Eligibility determines to be reliable authorities regarding the quality of public postsecondary vocational education in their respective States, for the purpose of determining eligibility for all Federal student assistance programs. (Sect. 438a, HEA 1965 amended 1972.) The effect of the so-called Mondale amendment is to increase the work and scope of AlES and the State agencies so recognized. What~s the role of the accredlting agenck~? The accrediting agencies are the normative regulators despite their voluntary, private nature. States'tend to fall back on criteria established by a nongovernmental body instead of establishing their PAGENO="0165" 2785 38 own criteria as to quality. For example, many State licensing laws specify that accredited schools shall be exempt from licensing, and nonaccredited schools shall be inspected to see if they approximate the standards set by the accredited schools. Federal agencies do the same. Many laws require accreditation, or equivalent or some standard derived from accreditation. The results of this reliance vary. On the one hand, accrediting agencies have taken the view that they came first, that they have their own purposes and that Federal agencies should not now force them to do things which may be useful to Federal officials, may even serve Federal purposes, but present a distortion of their own procedures and intent. Federal insistence on adherence to equal opportunity or affirmative action are examples, with some accrediting bodies objecting to their proposed role of becoming Federal enforcers (regardless of the merit of the rules to be enforced). All of the accrediting agencies now recognized by the U.S. Commissioner achieved such recognition by virtue of applying for it, thus demonstrating their willingness to meet the published criteria for recognition. But at the same time, the accrediting bodies are reluctant to engage in full disclosure, to publicize those institutions which have been put on probation, or to disclose some of their findings which could be used by students and applicants as an early warning system. PAGENO="0166" 2786 39 Conversely, the accredIting agencies began life--some started at the turn of the century--with an institutional agenda; their standard-setting function and recognition has been useful to consumers. Role of consumeragencies Further assistance to the consumer is provided through a variety of consumer leaders and organizations, including national consumer advocate associations, better business bureaus, municipal consumer officials, various ombudsmen, and the growing number of groups seeking to organize, defend and protect consumers. Trade unions have also stepped up their interest in the consumer field, and private business is becoming increasingly responsive. In addition to their current consumer and educationally oriented activities, these organizations could also play a role in the awarding of licenses or approval of courses. The State Approving Agencies, under the law, must inquire as to the reputation of the faculty, staff, administrators and owners of a school. They would be free to consult consumer organizations regarding their knowledge of the schools, their personnel and their performance. State and accrediting agencies could also ask consumer organizations for recommendations regarding consumer participation in their procedures. While linkages between the educational agencies and the consumer organizations have been weak, the Denver conference sponsored by ECS, FICE and others last March, and the follow-up conference in Knoxville, served as a forceto strengthen these links. PAGENO="0167" 2787 40 Chapter IV Issues and Implications Not only is there a historic trend toward greater consumer protection, there also is growing Congressional interest, rising activity by governmental agencies at all levels, and increasing clamor by consumer groups to have a voice in the structuring of the rules by which business is done in the United States. Education, because it has been traditionally and predominantly non- profit, has not achieved great visibility in the area of consumer protection. The proprietary sector, which comes under the mandate of the Federal Trade Commission, has undergone scandals, exposures, and legislative counterthrusts, especially in the reforms embodied in the Second GI Bill of Rights (1952) which overcame some of the abuses of the original, 1944, version. Todays workload of the FTC shows that about six percent of all FTC consumer protection activities concern proprietary schoois. In short, there are notable pressures for Federal agencies to make a greater effort to protect consumers in education, and there is widespread agreement on the need to prevent or counteract illegal and objectionable consumer practices in education. There are unresolved issues as to just how the Federal effort is to be carried out. To be sure, each agency has responsibility for improving its own procedures, including systems designed to overcome malfunctions. PAGENO="0168" 2788 41 But it is also true that the consumer probably will be served better if there is a coordinated effort designed to combine the efforts of Federal, State, and local agencies, as well as voluntary bodies. What should the Federal effort be to protect educational consumers? On the one hand, there is the tradition against Federal control or interference in education, reinforced by explicit legislative provisions in many educational laws. For instance, the following statement appears in Section 422 of the General Education Provisions Act: No provision shall be construed to authorize any department, agency, officer, or employee of the United States to exercise any direction, supervision, or control over the curriculum, program of instruction, administration, or personnel of any educational institution, school, or school system, or over the selection of library resources, textbooks, or other printed or published instructional materials by any educational institution or school system, or to require the assignment of transportation of students or teachers in order to overcome racial imbalance. On the other hand, there is the obvious fact that consumers are being exploited in a variety of educational settings, that State licenses are often weak or nonexistent, that accreditation provides inadequate assurance of business ethics or financial stability, that none of the existing agencies, singly or in combination, has solved these problems. Further, there is the obvious fact that Federal administrators are charged with the protection of Federal funds. Thus, they have a mandate to exert diligence in determining who is to be eligible for the receipt of Federal funds and services. PAGENO="0169" 2789 42 Today, with the great amount of money available from public funds for student assistance, we see an apparent parallel increase in abuse of funding assistance programs and victimization of students; therefore, pressures for a greater and stronger Federal effort are building up, and putting to the fore the question of how far the effort may properly go and how it should be organized and managed. The issue is unresolved and probably should be defined pragmatically in the sense that increased Federal efforts will be accepted because they are helpful, supportive, noncontrolling, or an evident part of Federal vigilance over Federal interests. The challenge is to resolve the issue constuctively and cooperatively. Who is to provide Federal Leadership? Another unresolved issue is the matter of leadership. There exist differences in readiness, mandate, timing, and enthusiasm for consumer protection among various Federal agencies; there is no past history of shared or pooled funding (with the significant exception of support for the ECS Task Force and the Denver and Knoxville Conferences). As matters now stand, both power and funding rest with different Federal agencies, each of which follows its own agenda. The VA, for example, is very diligent in enforcing certain standards, especially regarding refunds, so that veterans get a more generous refund from some schools than do comparable nonveterans. Conversely, the VA and its State Approving Agencies appear to do littlein the way of PAGENO="0170" 2790 43 consulting the Federal Trade Commission as to information about schools in the FTC files. Similarly, the Office of Education administers Congressionally mandated standards of eligibility, designed at least in part to protect Federal funds. The OE system, however, with its heavy reliance on private accreditation, is essentially separate from the VA system with its mandated reliance on State Approving Systems. The Federal Interagency Committee on Education has demonstrated leadership but lacks authority. The present strategy report is designed to achieve further interagency cooperation and may become a building block toward coordinated Federal leadership. The question of Federal delivery system5 No single agency today has been given a mandate to protect the educational consumer. This raises the quest~ ~n of how the consumer is to be protected if there is nobody in charge. Stated differently: various agencies now make some effort to protect the consumer, but could or should there be a better "delivery' system for student protection, and who is to operate it (and pay for it)? There is the initial problem that the student, who thinks he has been "ripped off," has no obvious place to complain. The Office of Consumer Affairs (HEW), with FTC and the Subcommittee on Educational Consumer Protection, has designed complaint forms which list numerous potential places where complaints should be lodged. But the very length of the list (which includes the Fraud Division PAGENO="0171" 2791 44 of the U.S. Postal Service)--and the list is quite realistic--may discourage the potential complainant and also scatter complaints among the various agencies in such a way that points of abuse and friction will emerge only slowly. The dispersal of complaints increases when private agencies (accrediting associations) and State agencies are included. Every agency, in good faith, may be able to report that it receives very few complaints and that the problem therefore is minor. The weakness of the complaint form reflects the fragmentation of the Federal agencies and poses the questions not only of which (and how many) Federal agencies are involved but also who is to operate a system of consumer protection, who is to coordinate the probable subsystems, and how they can best be made to dovetail. There are several alternative means of delivering one or more aspects of the Federal thrust. (1) A single Federal agency may become the lead agency, a kind of primus inter pares. (2) FICE itself could become the administrative mechanism, based on the fact that substantially all of the relevant agencies belong to FICE. (3) An interagency group other than FICE could administer a program. (4) At least part of the effort--technical assistance, training, as well as evaluation and research--could be entrusted to a non- governmental third party such as the Education Corrmiission of the States. PAGENO="0172" 2792 45 How can existing agencies (Federal, State, local and private) bèstimulated to improve their `systems `and make the* common effort more effective? While any Federal strategy in this or other areas of effort must emphasize direct actions to be taken by components of the Government, no effective strategy in this area can ignore the real and potential contributions of non-Federal agencies and organizations. In developing the cooperative assistance of these groups, the Federal government should engage in a role of leadership and developmental support. What is the role of the accrediting agencies? First, a word of caution: Accreditation takes many forms (see page 12, supra) and even those accrediting agencies which are "recognized' by the U.S. Commissioner of Education differ greatly in their self- assigned roles and standards. A self-study for one of the traditional regional accrediting associations tends to put a much stronger emphasis on educational content and quality than the vocational/technical accrediting associations, most of whose members are proprietary and profit-seeking. Thus, the vocationally orientated accrediting agencies put greater stress on financial stability and business practices, tend to look at specific courses and curricula of a school, while the regionals undertake institutional accreditation which makes no claim to accredit every course, every department, every aspect of an entire institution. These distinctions are important because the Office of Education relies heavily on the private accreditin~ agencies for its PAGENO="0173" 2793 46 determination of eligibility for Federal programs. For certain publicly supported vocational schools, the Office of Education also recognizes State approval agencies and, in any event, seeks to make sure that all schools operate legally (which may be without a license if the State law does not require a license). The determination made by the AlE Staff of OE tends to have many consequences, because other Federal agencies tend to rely on this determination. The approval system for veterans ~ rely on accreditation (according to the law) and the Immigration and Naturalization Service may recognize schools for nonresident alien students on the strength of OE recognition. Further, many State certification boards, Federal and State civil service commissions, foreign agencies (seeking to determine validity of U.S. degrees, for example) and even the editors of dictionaries who include lists of domestic colleges and schools--all of these often rely upon the `recognition" of accrediting bodies awarded by USOE. The issue is whether the system which is now prescribed in current laws is the best and most effective one to achieve the results intended or whether it has become obsolete since "recognition" was legislated in 1952. Further, there is the question: If accreditation is not a reliable indicator of quality, then what can or should be put in its place? What is the role of the States? Every known domestic system of approval or eligibility relies on the States, but only as a minimum, and always with the imposition of PAGENO="0174" 2794 47 additional criteria. The issue then is not whether State licensing laws are adequate--in many States they are not, and in still others they are poorly enforced--but rather whether the hand of the States can or should be strengthened so that their criteria can become reliable indicators of quality. While the licensing of educational institutions is a State responsibility, performance has been sufficiently weak that the Congress mandated, and the VA funds,the operation of a separate State Approval System for eligibility for veterans benefits. This system operates in such a way that it may rely on private accreditation as a criterion of approval, or it may rely on an alternative system. We thus see the strange arrangement of a system which relies on accreditation (mostly in higher education) and also competes with accreditation (mostly in the non-degree area). Very few States or Federal agencies rely on the VA/SAA system, although the Social Security Administration does include it as one of its four alternative means of determining eligibility for its 600,000 student beneficiaries. The question is similar to the one about accrediting agencies: If State licensing or approval for veterans is not a reliable indicator of quality, then what can or should be put in its place? Conversely, what can or should be done to strengthen the performance of the States? PAGENO="0175" 2795 48 ~~pter V Recorrniended Principles and Action Steps--Federal Strat~g~ Principle 1 All of us--Federal officials and school administrators, professionals and private citizens--need to develop greater sensitivity to the rights of others. As Federal officials, we are charged with the constructive and conscientious use of Federal funds; we are concerned with the integrity of our society and its ethical standards. As members of this task force (subcommittee) we are specifically charged with safeguarding the rights of educational consumers. These gu&ding principles become meaningful only if they are translated into actions, into very specific steps which we enumerate below, although the list is by no means exhaustive. We think students can better protect themselves if they have access to meaningful information, and accordingly our recomendations deal with full disclosure. We think schools should not mislead in their advertising (and neither should food stores, automobile dealers, or anyone else), and that educators should be held to the highest standards of ethics because education is supposed to lead to truth and personal growth; educators have assumed certain functions of leadership and guidance which automobile dealers have not assumed. We also are conscious of the fact that students are incompletely informed, because students .gy~. students have shown that they seek additional knowledge and may thus be presumed to be less capable of fending for themselves than other consumers. PAGENO="0176" 2796 49 The student is the primary consumer of educational services. As a result of educational inexperience and as a result of the expensive and crucial nature of the service he is purchasing and finally as a result of the potential for consumer abuse in the future service contract used by most schools, the educational consumer not only has responsibilities, but he has important "consumer rights." When these rights are not respected, the student should be protected and have redress mechanisms available to him. Where he has responsibilities, he must be fully informed of, and held accountable for, these responsibilities. Action Steps We recommend that: A. Students who apply for Federal funds should be given an informative statement of their rights, and their responsibilities. The statement should be stated clearly and in readable type; among other possible uses, such a statement should be made part of the application so that the student will have ready exposure to it before he signs the application. B. When students' rights are not respected, they should have redress mechanisms available and adequate information to use them effectively. The attached Complaint Guidelines (see Appendix IV) prepared by the Subcommittee, are designed to provide such information. C. Federal agencies should relinquish any rights they may have as a "holder-in-due-course" of student obligations if a PAGENO="0177" 2797 50 student has established a legitimate claim of unfair or misleading practices. In such cases, the government should proceed against the school to recover all sums paid out under, for example, the Guaranteed Student Loan Program. Principle 2 Consumer concepts, legislation and mechanisms should be activated In the educational marketplace as they are in the traditional market- place. Action Steps We recommend that: A. There be created a Federal Student Tuition Insurance Corporation which should have as its essential purpose the protection of students and their tuitions if postsecondary schools close. B. There be established a Federal Interagency Center on Educational Consumer Complaints with the primary purpose of developing and coordinating interagency activities in this area. t~mong the functions of the center would be that of collecting, recording and disseminating consumer complaints and information to appropriate Federal agencies. In addition, the center would attempt to improve links of communication between consumer organizations, Federal and State agencies, accrediting agencies, and education groups. It would act as a research instrument on volume and nature of complaints as well as an early warning system against possible educational abuses. 78-226 0 - 77 - 12 (Pt.4) PAGENO="0178" 2798 51 C. Federal agencies should continue to develop and to disseminate educational consumer information and materials such as that of the Federal Trade Commission. D. All Government and other publications regarding the job market (and all reprints of the same), capable of being used in any way by particular schools as a selling tool, should have a disclaimer in larger type to the effect that the estimates made are general and do not necessarily apply to graduates of any particular school; the only reliable information is that schools placement rate. In addition, all such publications should be clearly dated. Federal agencies, individually or in concert, should direct resources to the identification and evaluation of consumer education problems. In addition, all. Federal agencies should undertake a systematic analysis of their own programs of educational assistance in order to uncover and correct opportunities for abuse of such programs. F. The educational consumer finds it difficult to distinguish between accreditation, approval, renewal with stipulations, recognition by the U.S. Commissioner of Education, and other subtle distinctions in connection with the approval or accreditation process. Federal agencies need to take the lead in standardizing the use and meaning of these and related terms. G. The action steps enumerated in Principle 3. D. (2) and (3) following should be applicable to all postsecondary educational institutions * PAGENO="0179" 2799 52 Principle 3 The Federal Government, whenever it disburses funds, directly or indirectly to support educational institutions, programs and students, must assume responsibility as to how those funds affect the consumer of education as well as education and program objectives. Action Steps We recommend that: A. All Federal agencies which recognize, approve or certify post- secondary institutions or programs should make protection of the educational consumer part of their criteria for recognition, approval or certification. In cases when an approval or certify- ing function is assigned to an agency which does not possess the requisite skills involved, the agency should delegate this responsibility to, or contract with another agency which has the necessary mechanism for carrying out the function. B. Agencies should review their criteria at least yearly to insure that they are providing maximum possible protection to the con- sumer of postsecondary education. C. If such protection is not achieved, agencies shall take the necessary steps to meet their criteria and/or change their criteria to achieve the desired level of educational consumer protection. D. In reviewing the statutory requirements for establishing insti- tutional or program participation in Federal aid programs, agencies should include the following consumer-oriented measures: (1) Alternative evaluative processes fordetermining PAGENO="0180" 2800 53 institutional probity and the quality of training or education offered. (2) As conditions for eligibility of postsecondary ~ institutions or programs, the institution should be required to: (a) Make full public disclosure of student dropout and course completion rates, and in the event the school publicly advertises job claims, it makes disclosure of job placement rates, and all other "material information" concerning the school and its programs. (b) Demonstrate achievement of occupational objectives through placement of graduates in the positions for which they sought training. (3) As a condition for eligibility of postsecondary institutions or programs, the institutions should be required to charge only for services actually rendered. For that reason, institutions should establish and publish a pro-rata refund policy. (4) Procedures for terminating the eligibility of any institution participating in Federal student or institutional assistance programs when it is established that such institution utilizes advertising, sales, enrollment, or other practices of any type which are erroneous, deceptive, misleading, or unfair either by acts or omission. PAGENO="0181" 2801 54 E. Use by a postsecondary institution of deceptive or high pressure sales techniques should be considered as negative factors pertaining to eligibility for participation in Federal funding programs. Serious consideration should be given to an outright prohibition against use of such techniques as a condition for participation. F. Government funding and guarantee agencies should require schools to have a ten-day affirmation period as a requirement for eligibility. An affirmation period is a variant of the "cooling- off' concept. It is where the student is required to take affirmative actions to continue in force a contract for educational services rather than to take affirmative actions to cancel the contract as is seen in the conventional "cooling- off" formulation. This would conform to the affirmation requirement presently utilized by the Veterans Administration. Prlnclple 4 State educational agencies and private, associations or agencies which have direct responsibility for accrediting, approving, licensing and certifying educational institutions and students, should do so with issues of consumer protection clearly in mind. The overall effort to protect the educational consumer must involve consumer agencies and organizations, both public and private. Action Steps We recomend that: A. FICE explqre with the Education Cormission of the States development PAGENO="0182" 2802 55 of a clearinghouse of information, which in effect would be a data bank of information on all postsecondary education programs. Such a data bank might serve to enable students, prospective students, counselors, and other consumers of postsecondary education services to make informed judgments regarding selection of institutions and/or programs that would be responsive to their needs. B. FICE continue to support the Model State Legislation for Approval of Postsecondary Educati onal Insti tuti ons, as recommended by the Education Comission of the States, June 1973. C. FICE encourage ECS and the National Association of State Administrators and Supervisors of Private Schools to provide assistance to those States which do not possess `approval legislation, or which are Interested in streamlining the existing legislation. The purpose of this assistance should be the adoption by States of legislation at least as strong and pro-consumer as the Model Legislation. D. Federal assistance and guidance should be provided under appropriate guidelines to State and, private agencies and organizations for the following purposes: developing greater competence; improving systems analysis and design in the educational evaluative process; and encouraging the exchange of information between organizations concerned with consumer protection and education. Any such assistance should be for developmental rather than operational purposes. PAGENO="0183" 2803 56 E. FICE encourage and work with the National Office of Consumer Affairs to involve consumer agencies and organizations in educational consumer protection activities. In sunmary, we recommend that Federal agencies look to their own systems, cooperate with other Federal agencies, and also take a supportive stand in effecting better liaison and cooperation with State, local, public and private agencies to protect the educational consumer. PAGENO="0184" 2804 APPENDICES APPENDIX I FEDERAL INTERAGENCY COMMITTEE ON EDUCATION Virginia V. Trotter, Chairperson Assistant Secretary for Education Department of Health, Education, and Welfare Members *Cemmjssioner of Education *Director, National Institute of Education *Departmemt of State *Department of Defense *Department of Agriculture *Department of Labor *National Science Foundation *Energy Research and Development Admi ni strati on *National Aeronautics and Space Administration ACTION Alcohol, Drug Abuse, and Mental Health Administration Civil Service Corrmission Coniiiunity Services Administration Department of Coninerce Department of Housing & Urban Devel opment Department of the Interior Department of Justice Environmental Protection Agency National Endowment for the Arts National Endowment for the Humanities National Institutes of Health Office of Child Development Social and Rehabilitation Service Veterans Administration Observers *Office of Management and Budget *Council of Economic Advisors Council on Environmental Quality National Academy of Sciences Smithsonian Institution Bernard Michael Executive Director *Agencies named in Executive Order 11761 PAGENO="0185" 2805 60 Chart A APPENDIX II VARIATIONS OF ELIGIBILITY 100% POSTSECONDARY VOCATIONAL SCHOOLS 1971 (100% = No. participants Schools in OE survey) partici- pating in OE survey* 69% Listed in OE 56.3% Directory Eligible for VA 35.4% Eligible for FIS Loans 24.9% Accredited ____________ (OE Recog- I nized) I egionally o __________ __________ __________ ~jAccredi ted Number of 11,700 8,182 6,594 4,145 2,917 1,077 Pos tsecondary Vocational Schools *Total number of postsecondary vocational schools is unknown, and there is no reliable estimate. This survey taken from Orlans etal,Table 6, p. 317. Source: Directory of Postsecondary Vocational Schools, 1971, (OE 1973) p. XIX. PAGENO="0186" 2806 VARIATIONS OF ELIGIBILITY HIGHER EDUCATION - 1972 81% Listed in OE Directory of Higher Ed. 61% Accredi ted (OE Recog- \ nized) \ \ 100% \ \ \ \ 76% \ Figures adjus d to scale comparable to hart A. APPENDIX III 100% (100% = total no. estimated) Estimated Total Number Insts. of Higher Ed. 0 Number of schools 61 Chart B 19% Not accredited \ 3,2341 2,6202 1,996 1Orlans et al, p. 308, from SAL\ Survey. 2As adjusted by Orlans et al, p. 296. 624 PAGENO="0187" 2807 62 APPENDIX Iv DRAFT SUGGESTIONS BY THE FICE SUBCOMMITTEE ON EDUCATIONAL CONSUMER PROTECTION FOR EDUCATIONAL COMPLAINT GUIDES PAGENO="0188" 2808 63 EDUCATION COMPLAINT GUIDES No organized and well-publicized mechanism exists at any level to handle complaints concerning educational consumer problems. These problems are increasing, as is the number of agencies and organizations -- educational and consumer-oriented, Federal and local -- involved in solving these problems. Likewise, more con- sumers are now voicing their complaints and concerns. The need for effective action, therefore, has been intensified. The FICE Subcommittee on Educational Consumer Protection has incorporated into its strategy for Federal action its personal concern about the present unreliable, or non-existent, redress system. It has also incorporated the recommendations of the first National Conference on Consumer Protection in Education and recommends to FICE as part of the strategy that a Federal Educational Complaint Clearinghouse be established. Attached are two drafts of complaint guides. D-R-A-F-T (A) is the simpler version. -- It asks the student to document his or her com- plaint and submit it directly to a Federal office. -- This Federal office, which is not yet established, would acknowledge receipt of the complaint to the student. -- It would forward to, and follow-up with, the Federal or State, public or private, agency having legal authority to take action. -- It would also notify appropriate Federal offices if and when a certain number of complaints were received concerning the same school. This warning could alert the Federal student assistance programs, for example, that they should watch closely, if not curtail, loans they insure or benefits they approve for students to attend that school. -- The Federal office would also issue show-cause orders or take other legal action to investigate potential abuses by, or temporarily halt Federal outlays to, a certain school. -- The Federal office would serve as an information and research center, coordinating and documenting information and issues on educational consumer problems. It would be able to keep informed the other interested Federal, State and, local agencies and organizations. It could also handle some of the badly needed research into educational.consumer issues. PAGENO="0189" 2809 64 D-R-A-F-T (B) represents a fairly complex redress mechanism under which the student must figure out which agency has authority to help him. The student must also be willing to send a copy of his complaint to a yet undesignated Federal office. This office would simply record complaints and coordinate with other agencies actively involved in complaint handling. The FICE Subconiiiittee is now studying possibilities for educational redress in greater detail. Obviously much thinking will be needed on the establishment of a Federal office, pilot test for the complaint guide, involvement of consumer organizations, dissemination, research, etc. PAGENO="0190" 2810 65 D-R-A-F-T (A) EDUCATIONAL COMPLAINT GUIDE Misled? Signed in a hurry? Promised a job? Hit with unfair refund policies? The professors and administrators don't respect your adult consumer rights? **** INTRODUCTION ~ This guide may help you if you or your parents believe you are, or have been, victimized by an educational institution or an employee of such an institution. It provides a complaint form for use by you, by those who can help you, and by the Federal agencies who want to resolve educational consumer problems. The word "consumer" here means you -- the person who agrees to purchase educational services of an institution, program or skills center at the post- secondary level (meaning after high school). This guide can be most useful to consumers with specific complaints or definite concerns. People with "gripes" against an institution should more properly express these dissatisfactions to the institution's student council or administration. HOW TO COMPLAIN If you have a serious complaint: 1. Contact the school and discuss your problem with a school official. 2. Put your complaint in writing (see the attached form). Keep a copy for yourself. Save copies of all correspondence. 3. Mail a copy of your complaint to the Federal Student Complaint Center, _____________________________________ _____________________________________ This office will acknowledge receipt of your complaint, forward your complaint to the public or private agency with legal authority to handle your complaint and follow up on the progress that agency makes to resolve your complaint. 4, Be patient and thorough. Document your discussions and correspondence. And collect all relevant information such as copies of school catalogs and advertisements. PAGENO="0191" 2811 66 COMPLAINT FORM (Please Print) Today's Date ________ (Information You Provide Will Be Considered Confidential) My Full Name My Address My Telephone Number (Area Code j School Name School Address S School Telephone Number (~Area Code THIS COMPLAINT CONCERNS - check one or more of the following: 1. Money owed to me by the school 5. Misrepresentation of the school's job placement 2. Money owed by me to a bank or services school 6. Abuse of student rights 3. MisleadIng claims or ads about the school - 7. Other (Please identify) 4. Misrepresentation of scriool's refund policy, contracts or agreements - _____________________________________ EXPLAIN IN FULL YOUR COMPLAINT - describe events in the order in which they happened; include dates and names; identify what you can about the school (e.g., were you told It was accredited by the Federal government or approved by the Veterans Administration?) Name of school official with whom I have discussed this matter: ____________________ ___________________________ His/her title: _________________________________________ When: _______________________ PAGENO="0192" 2812 67 D-R-A-F-T (B) EDUCATIONAL COMPLAINT GUIDE Misled? Signed in a hurry? Promised a job? Hit by unfair refund policies? The professors and administrators don't respect your adult consumer rights? ~ INTRODUCTION ~ The purpose of this complaint guide is three-fold: to offer guidance to studen~ts or parents who believe they are, or have been, victimized by an educational institution or an employee of such an institution; to provide a complaint form for use by the consumer or agency; and to identify some of the public and private agencies who can help resolve educational consumer problems. We also hope to research consumer problems in the educational sector. Therefore, this complaint guide may serve both consumers and agencies attempting to resolve educational consumer problems. The word "consumer" here means the person who agrees to purchase the educational services of an institution, program or skills center. The guide is concerned, therefore, with students as consumers, particularly at the postsecondary level. V This guide can be most useful to the consumer with a specific complaint or definite concern. People with "gripes" against an institution should more properly express these di ssatisfacti ons to the i nsti tution' s student council or administration. HOW TO COMPLAIN If you have a serious complaint: 1. Contact the school and discuss your problem with a school official. Keep a record of your discussion. 2. Put your complaint in writing (use the attached form). Keep a copy for yourself. Save copies of all correspondence. 3. Submit your written complaint to one or more of the agencies listed on pages 69-70 with a notice that you will follow up in 10 days with a telephone call (If at all possible; if not, write again). 4. Mail a copy of your complaint to the Federal office listed on page 70. 5. Call the agencies in (3) above to see how they are progressing with your problem. 6. Be patient and thorough. Document your discussions and correspondence. And collect all relevant information such as copies of school catalogs and adverti sements. V V PAGENO="0193" 2813 68 COMPLAINT FORM (Please Print) Today's Date _________ Full name Address Telephone number (Area Code ) School's name School's address School's telephone number (Area Code THIS COMPLAINT CONCERNS - check the following: 1. Money owed to me by the 4. Misrepresentation of school's school refund policy, contracts or agreements 2. Money owed by me to a bank or school 5. Misrepresentation of the school's job placement 3. Misleading claims or ads services about the school 6. Abuse of student rights EXPLAIN IN FULL YOUR COMPLAINT - describe events in the order in which they happened; include dates and names; identify what you can about the school. Name of school official with whom this matter was discussed: _______________ -, His/her title: __________________________ When: _________________ 78-226 0 - 77 - 13 (Pt.4) PAGENO="0194" 2814 69 REDRESS There is no one office which can solve all educational consumer problems. You may have to write to several offices; please be patient. The list below is not exhaustive, but we have tried to identify the major educational and consumer offices that could produce results for you. Be sure to send a copy of your complaint to the Federal office mentioned on page7~T 1. Federal Agençj~ A. Accreditation and Institutional Eligibility Staff Bureau of Postsecondary Education U.S. Office of Education Washington, D.C. 20202 (If the educational institution or program is participating in Federal assistance administered by the U.S. Office of Education, such as the Guaranteed Student Loan Program) In most instances where the school or program is accredited by an accrediting agency or association recognized by the U.S. Commissioner of Education, the staff conducts its review in conjunction with the appropriate accrediting body. B. Bureau of Consumer Protection Federal Trade Commission Washington, D.C. 20580.. (If the educational institution is a proprietary profit-seeking vocational or home study school) C. Fraud Branch, Postal Inspection Service U.S. Postal Service Washington, D.C. 20260 (If the educational institution or program does business by mail, or uses the mail to transport its advertisement which you believe leads to fraud) D. Education and Rehabilitation Service Veterans Administration Washington, D.C. 20420 (If the institution or program is approved for veterans education benefits) E. Aviation Education Programs Division Office of General Aviation, Federal Aviation Administration Washington, D.C. 20590 (If the institution is a flight school or aviation mechanics school approved by the FAA) F. Office of Consumer Affairs Department of Health, Education and Welfare Washington, D.C. 20201 (This office will be interested in your complaint, but will only be able to refer your complaint) PAGENO="0195" 2815 70 II. State and Local Agencies A. State Licensing Agencies (Find out from the school which State agency, if any, licensed the school -- probably the State Department of Education or the State Approving Agency for veterans benefits) B. State, Regional or National Accreditation Agency (Find out from the school if it is accredited and by which agency) C. State Attorney General's Office (Assistant Attorney General for Consumer Protection) D. County or City Offices (Call the Mayor's Office or check the telephone book) III. Private Consumer Organizations A. Citizen Consumer Councils B. Legal Aid Society C. Better Business Bureau D. Newspaper and TV "Action Lines" (To find addresses of the above, ask a friend or consult the telephone book) IV. If all else fails, write your State or U.S. Senators and Congressmen. NOTE: Please mail a copy of your complaint to the Federal office located at You will be helping us serve you. This copy will be used for official purposes only. YOUR OWN NOTES PAGENO="0196" 2816 [Froni the Change, December 1976] VIEWPOINT-IS THERE FRAUD IN EDUCATION? (by George Arnstein) Yes, there is fraud in American post-secondary education, ranging from diploma mills to phony student loans. There also is friction because various agencies, including state and federal governments, are trying to clean things up. The colleges, feeling overregulated and virtuous, tend to resist, and the whole issue of consumer fraud-and consumer protection-is *attracting in- creasing attention. The problem has several dimensions, deriving essentially from the long tradi- tion of state and local control and the prohibitions against federal interference. This means that federal administrators have resisted federal licensing of schools (with some unusual exceptions such as aviation schools licensed by the Federal Aviation Administration), have relied on state charters and licenses, and above all have turned to private voluntary accreditation as a means of quality control. This nonsystem worked reasonably well in the past when college students tended to be the Sons of college graduates who went to established colleges or their more recent replicas: Everyone knew the rules of the game and how to cope with the puffery of college catalogs, the policies of no refunds, the bend- ing of rules for promising athletes, the favoritism for offspring of alumni, and the courtesies extended to certain trustees or prospective donors. Besides, colleges were expected to function jn, leco parentis, to the satisfaction of the parents and with the acceptance of students who were told when to register and when to attend chapel and physical education. Further, there was no federal money involved, so there was no need for federal regulation, except for an occasional postal inspector who sought to restrain an occasional diploma mill. Federal funds entered the picture with the passage of the GI Bill in 1944 in- cluding stipends for veterans attending college, trade school, on-the-farm train- ing, and other forms of `postsecondary" education (a word not then in common use). The result w-as an immediate increase in fraud, scandals that provoked a Presidential message on reforms, and revisions in the second (1951) edition of the GI Bill devoted to veterans of the Korean war. As federal programs multiplied-basic grants, federally insured loans, supple- mentary grants, w-ork-study, Social Security for dependents, graduate fellow- ships-so did the opportunities for abuses. Veterans learned how to sign up for courses they did not intend to complete just to collect a monthly stipend. College administrators used such nonattending students to boost their enrollment figures to justify larger budget requests. Profit-making schools hired more salesmen. collected tuition, and encouraged federal loans, including the diversion of the proceeds to buy automobiles and other goodies. Education is not unique but it may have been unprepared. Educational administrators sometimes were taken in by enterprising students and sometimes acted in collusion with them to exploit the flow of federal funds. The dimensions of the problem are massive: In the case of the federally guar- anteed student loan program, the General Accounting Office (GAO) estimated the defaults would reach 24 percent; the U.S. Commissioner of Education ob- jected that this was too high, that the defaults would reach "only" 18 percent. As for veterans' payments, the GAO has found rising and massive overpayments, probably exceeding ~8QO million in 19713 for all educational beneficiaries under the GI Bill. Some of the defects go back to Congress, which authorized prepayments to vet- erans and thus helped to swell overpayments. Other errors are at the adminis- trative level, such as the heavy reliance on state approving agencies that in many states have neither the manpower nor the talent to carry out the tasks they agree to perform. And a central weakness rests with the accrediting bodies that were never intended to he inspectors of the business office and are less than reli- able guardians of the quality of educational services, Nevertheless the Commis- sioner of Education annually lists acerediting agencies that he deems to I)e reliable authorities on the quality of education offered by their institutions. While some students gleefully exploit the system, others are frustrated because they are being promised too much and are getting too little. Profit-making schools are the worst offenders, with offers of free lifetime placement services, modern equipment, references to high salaries after training, and aggressive sales- iersons on commission, Some colleges use equally offensive tactics, including PAGENO="0197" 2817 false claims of accreditation, invocations of faculty who ~re not part of the teaching staff, allegations of student financial aid that is actually minimal or heavily restricted, and general reliance on the obsolescent finding that college graduates have much better lifetime earnings than high school graduates. When students learn that the free placement service consists of a referral to the yellow pages, or when they learn that the high salaries go to programmers while the school has trained them in low-paying keypunching skills, they feel cheated and alienated, and have been known deliberately to default on their loans. Some think they are punishing the school when in fact their personal liability continues. It is possible that part of the problem derives from a series of misunderstand- ings. But in fact, many colleges and trade schools have often been reluctant or unmotivated to deal with shortcomings such as misleading and inaccurate adver- tising, indiscriminate and overly aggressive recruiting, lack of salient institu- tional information, inferior facilities, course offerings, and staff, false promises of job placement and learning opportunities, and inadequate refund policies (or failure to abide by them). This list was used by Terrel H. Bell, former U.S. Com- missioner of Education. It notably omits the overpayments to veterans who drop out of school, probably because the Commissioner has no responsibility for a pro- gram entrusted to the Administrator of Veterans Affairs. What seems most startling is that nobody is in charge of preventing fraud and abuse in American education, a fact that reflects the deliberate diversity and decentralization that provide student financial aid to almost every type of student. No single set of regulations is likely to cover the range of contingencies, and thus the regulations multiply and go into increasing detail as they seek to keep up with the variety of educational experiences. Institutions are having trouble w-ith full disclosure because they have trouble describing accurately their own educational requirements for programs that have no regular classes, no single traditional textbook, no uniform requirements of students, and no final examination. While the Newman Report claimed that there is increasing homogeneity among colleges, which would make regulation rather more simple for the federal watchdogs, there is in fact great reliance on life experience, fieldwork, individual projects, and other variations. The Vet- erans Administration is going mad trying to keep its disbursement system honest and responsive. Life was so much simpler when schools took daily attend- ance and things were neat and orderly and homogeneous. What to do cannot be described in a short essay, but clearly the schools and colleges can begin by providing better, more candid disclosure. What can a student reasonably expect in the way of equipment, staff, courses, and facilities? What is the attrition rate and how do the graduates fare in the labor market? What are the various charges and refund policies? How much student financial aid is readily available? State authorities need to tighten their operations in most states. They now issue charters and licenses rather generously, and state approving agencies approve courses for veterans without offering any assurance that this "approval" means a damned thing. The approval system is heavily subsidized by federal funds, authorized by rather detailed federal standards; it tolerates continuing violations. For example, there is a federal statute prohibiting misleading adver- tising that state approving agencies are charged with enforcing. The accrediting bodies are a weak link in the chain. While students are told, sometimes by implication and sometimes explicitly, that accreditation means quality control and integrity, the accrediting bodies, when pressed, claim at best that they inquire into educational standards, that there are no absolute stand- ards, that each school is free to state its own goals and objectives (which are not necessarily the same goals or standards fed to the students in catalogs). In short, the accrediting bodies are being used for purposes never intended, and are expected to ensure standards they `cannot or w'ill not enforce. As for the federal government, it is trying to come up with a regulation for every evil rather than a system that provides incentives for preventing evil. When the default rate goes up, the answer at the Department of Health, Educa- tion, and Welfare is to hire another hundred bill collectors. When rising over- payments to veterans were disclosed by the GAO, the Veterans Administration tried to force the colleges to take daily attendance (and then explained that the instructions were misunderstood in some regional offices and on many campuses). PAGENO="0198" 2818 The basic flaw is simple: Academics have usually assumed that education is a clean, honorable enterprise that could do without the petty regulations of the world of commerce and profit. The first thing to do is to change this assumption, and the second is to design a system that takes advantage of self-regulation and disclosure, clarifies the role of private voluntary accreditation, and links the efforts of state licensing and approval staffs with an overall federal effort that could and should be kept to a minimum. It certainly could include some financial support `to pay for the services to be performed by state and accrediting officials on behalf of the federal administrators and programs. The reformed system also ought to recognize that students are adults, that they can and should be expected to look out for themselves, but that this calls for truthful and usable information. It also calls for the establishment of a place to complain if disclosures are thought to be false, misleading, or incomplete. Few schools and colleges today have an ombudsman, and there is no central agency where an aggrieved party (who may well be wrong) can take an appeal. Nobody is in charge; there is no system; and there is no agreement as to suitable ethical standards. PAGENO="0199" 2819 The National Academy of Education THROUGH EDUCATION TO EARNINGS? A review by Mary Jean Bowman The University of Chicago of Formal Education and Adult Earnings, by Ingemar Fägerlind Education, Occupation, and Earnings: A chievement in the Early Career, by William H. Sewell and Robert M. Hauser Higher Education and Earnings: College as an Investment and a Screening Device, by Paul Taubman and Terence Wales Proceedings of the National Academy of Education Vol. 3, 1976, PP. 22 1-292 Copyright © by the National Academy of Education, 1976 All rights reserved. PAGENO="0200" 2820 * BOOK REVIEW Mary Jean Bowman The University of Chicago Through Education to Earnings? Formal Education and Adult Earnings, by Ingemar F~gerlind. Stockholm: Almqvist & Wiksell, 1975. 105 pp. SKr12.50. Education, Occupation, and Earni~: Achievement in the Earl! Career, by William H. Sewell and Robert H. Hauser. with the assistance of Duane R. Alwin, Dorothy M. Ellegaard, Janet A. Fisher, Kenneth Lutterman, and Vimal P. Shah. New York: Academic Press, 1975. xviii + 237 pp. $16.50. Higher Education and Earni~: College as an Investment and a Screenii~g Device, A Report Prepared for the Carnegie Commission on Higher Education and the National Bureau of Economic Research (General Series 101), by Paul Taubman and Terence Wales. New York: McGraw-Hill, 1974. xxxiii + 302 pp. $17.50. Each of these books is concerned with the processes of career development, and each is a longitudinal study. Each gives central attention to what schooling may or may *Preparation of this review has been sponsored by the National Academy of Education under a grant from The Ford Foundation far support of activities of the Academy concerning public understanding of research on education. The opinions expressed are those of the author and do not necessarily represent the position of either the National Academy of Education or The Ford Foundation. tThe reviewer is indebted to the Guggenheim Foundation for the opportunity to extend her study of the literature that constitutes the background of this essay. More personally, she is heavily indebted to C. Arnold Anderson for his generous service throughout as teacher and editor. 221 PAGENO="0201" 2821 MARY JEAN BOWMAN not contribute to earnings. And each takes account of family background and personal ability. Each book was preceded by a stream of articles over the past decade appearing mainly in literature on social mobility and status attainment or on human investment (see Appendix A). The analyses by F~gerlind and by the Sewell-Hauser team, include occupational status in the sequence of individual attainment, whereas Taubman and Wales present crosstabulations of education-occupation relationships for major occupational categories and then repeat the re.gressions within three sets of major occupation categories. All of these studies are limited to males; none makes more than casual reference to females, though later a1alyses of Wisconsin and Swedish data may deal with them. `This is a review of certain books; several related, published and ongoing studies (including longitudinal ones) are not systematically discussed, though some are in the bibliography: for example, the Douglas, Ross, and Simpson (1968) studies in Great Britain; the Alexander and Eckland studies (1973, 1974, 1975a, 1975b) from North Carolina; Project Talent; the new longitudinal study of the 1972 high-school graduates by the IJ.S. National Center for Education Statistics. Samples vary in `character and scope, but all these studies are complementary to the ones here reviewed, and some comments have been affected by my casual perusal of interim reports. None of the three books reviewed includes race (or sex) comparisons, and I have omitted such studies in references and from my comments. However, three 1972 essays from the Johns Hopkins studies (Part 1, Coleman, Blum, Sorenson, & Rossi; Part 2, Blum; and Part 3, Coleman, Berry, & Blum [all Parts, 1972]) center on comparisons of white and black men. Their methodology and results may bear upon future work within each race. In particular, I urge readers to turn to Part III of that set of articles, in which the authors carried out a canonical analysis that yielded, first, a scaling of career options in which (from an early stage) the prestige and monetary advantages of the occupation were positively associated and, second, a scaling of career options along *a continuum from high prestige with low monetary rewards to low prestige with high monetary rewards. 222 PAGENO="0202" 2822 BOOK REVIEW Appendices B and C delineate these studies from two perspectives. In Appendix B each study is checked against a list of important specific questions. Appendix C presents the sample populations and the nature and quality of the data used; it should serve as a reference base throughout the ensuing discussion. The richest of these books in substantive contribution and in analytical ingenuity is that by Sewell and Hauser. They state their principal purpose as "to cha~t the complex process by which one's social origins influence one's capacities and achievement in education, occupational, and economic spheres." Their report makes use of a scholarly heritage from both sociology and human-capital economics. Their data relate to the cohort of 1957 high-school seniors (excluding sons of farmers) from Wisconsin; the main limitation of this report lies in the fact that only. the early postschool careers can be examined. In this book (in contrast to earlier Wisconsin work) for the first time, use is made both of data on earnings of individuals in the sample and on parental incomes for the year 1957, an inclusion in part reflecting economists' influence (notably Becker, 1964/1975; and Schultz, 1960, 1961, 1963). The lineage of the book, nevertheless, lies in the tradition of sociological work on intergenerational social mobility, more often approached recently as "the status attainment process." Like its forebearers, this analysis begins with family background and continues through ability, schooling, occupational status, and earnings. Using a causal-chain model and path analysis,2 the authors compare their findings with those of related studies. Particular attention is given to the influence of ~ others on plans (or aspirations) for further schooling and for occupation and to the influence of those aspirations, in turn, on attainments. F~gerlind's book is more modest, and it has a tidiness that reflects parsimony in formulation and in straightforward exposition--but' it is only a partial report on a body of data fully as comprehensive as that in * the Wisconsin study. His stated goal was "to study the 2Their principal methodology is similar to F'~gerlind's but includes metric as well as standardized coefficients in all cases. Diverse other methods are used for examination of particular related questions. 223 PAGENO="0203" 2823 MARY JEAN BOWMAN ways environmental and personal resources are converted into occupational status and earnings." He reports on 1,500 individuals who in 1938 were in their third year of school (normal age 10) in Malm~3, Sweden. The initial data were supplemented cumulatively by meticulously collected information about earnings and other items at five-year intervals from 1948 to 1968, and for 1971. ~1orking sometimes with collaborators--all generously backed by Professor Husen, who assured continuity in the overall project--alternative analyses have been reported. Though this team consisted mainly of educational psychologists, the innovative sociological approaches of recent years are assimilated. Responding to the arguments of human-investment economists and benefiting from their findings (especially Mincer, 1970, 1974a, 1974b), F~gerlind3uses the logarithm of earnings as a dependent variable, and he views his work as an application of the "resource conversion theory" (Coleman, 1971). Otherwise, F~gerlind makes less use of modern economics and does less to facilitate economic interpretations than the Wisconsin team. Reports from the Malm~ study have other distinctive features, however. Whereas the other two books cover only high-school graduates and thereby cut off the lower tail of the education variable, the Malm~ data include all levels of schooling (even nonschool training and training of individuals with deficient learning capability). Of special importance in the rIalm~ sample are the measures of mental ability in 1938 (at age 10) and then again in 1948 with the universal tests for military conscription. Thus, F~gerlind gives us the only analysis of schooling as an intervening variable between initial and later measured ability. Other attempts to explore this relationship have relied on constructed matrices that combine data from different sources (0. D. Duncan, 1968; 0. D. Duncan, Featherman, & B. Duncan, 1972; Jencks, Smith, Ackland, Bane, Cohen, Gintis, Heyns, & Michelson, 1972). F~gerlind also incorporated interaction terms within the path analysis. Finally, the Swedish study compares the effects of two different indicators of education, years of school completed and a measure of achievement level. The Halm~3 data are the most dependable of the three sets, 3These are standardized regression coefficients only in most cases, however. 224 PAGENO="0204" 2824 BOOK REVIEW although tho~e for Wisconsin are nearly as remarkable (see *Appendix C). * When we come to the study by Taubman and Wales, we have to turn our thought processes around. As their statement of purpose, to obtain good estimates of the rate of return to higher education at various ability and educati~n~1, 05 would be in a zero-order relationship; the reduction is from $310 to $282 by including these paternal traits.34 The ratio of a corrected to an uncorrected coefficient on education has come to be called the ~ (alpha) coefficient, following the debates over 34Unfortunately, we cannot compare equations including only education with those including education plus IQ, for the latter equation is not supplied (though it could be derived). 257 - PAGENO="0237" 2857 HARY JEAN BOWIIAN Denison's trude adjustments in 1962 and 1964 (see Psacharopoulos, 1973). So (1 - o') indicates the upward bias in the coefficient on education (Table 5). The maximum Wisconsin adjustment, including a better specification of background variables than was available to Taubman and Wales, is close to their maximum estimate for the younger men, and it is also close Denison's ~` adjustments of .60 to .66 (Denison, 1967). F~gerlind did not provide information with which to adjust the education coefficients using different combinations of control variables, as could be done from the Wisconsin data. However, it is possible to compare estimates of total effects on earnings of the EDUC and ACLEV indicators in equations that control for initial ability and family background with the zero-order relationships between education and earnings. There was actually a downward instead of an upward bias for early ages, and the highest upward bias for the ACLEV set was 10%. With EDtJC as the independent variable, on the other hand, biases go to a maximum of 33% for 1968. If all these manipulations are to be relied upon, Sweden seems to present a situation like that in the Taubman-Wales 1955 analysis provided we use an index of education that is simply years completed. On the other hand, if we use ACLEV as our education variable, controls for background and for initial ability make little difference. Again, how does schooling affect earnings? Interaction Effects, For egone Earn ings, and Quality of Education How ability and years of schooling interact to affect earnings is important. The customary assumption of a positive interaction is related closely to the vague assumption that people with greater ability would benefit more from an increment in amount of schooling at each level of education. Only recently have there been serious attempts to test these assumptions. I begin with Taubman and~ Wales. Theirs is the second use of the NBER-TH data to identify interactions between ability and schooling in 35On ability adjustments in growth accounting see Griliches (1970). . 258 PAGENO="0238" 2858 BOOK REVIEW their effects upon earnings. Hause (1972) found positive interaction ef.fects with regressions in double-log form and using a compound indicator of ability. Taubman and Wales have pushed a' step further by examining effects of ability on earnings within categories of schooling for early and late stages of. the career. They found larger within-education effects of ability for 1969 than for 1955, but 3~hese effects did not vary with the level of schooling. The Sewell-Hauser team (in particular Janet Fisher) found that ability made ` more difference to 1965-67 earnings among the young men with college educations than among men with high-school educations only. This is what would be predicted by ht,~pn-capital theory when earnings are stated in raw terms. More interesting in this part of the Wisconsin analysis are the careful attempts (by Fisher, Lutterman and Ellegaard) to clarify two other related issues. First, they attempted to identify the earnings individuals forego when they attend college. (For this analysis *a sample of youth of farm origin was included and compared with those of nonfarm origin.) It sometimes has been argued that superior individuals would have to add more to their earnings by attending college than would less able men because the former would have had larger foregone earnings while in college. Given higher foregone earnings, that the more able continue further in school would imply a positive interaction between ~ility and schooling in effects on future earnings. The 36Unfortunately, there appears to have been some misspecification in the equations that included interactions between graduate education and ability, where they obtained mixed results. Even for the NBER-TH sample, the debate about interactions between ability and education remains unresolved. (Using the same data base, Lillard confirmed Hause's findings in a life profile model; the ability effects and their interaction with schooling show up later because people with more ability have steeper earnings-experience trajectories.) 37Hause's test using the log transforms on earnings was a stronger one, but the size of the effect he found was not large. argument ignores ~consumption aspects of 259 PAGENO="0239" 2859 MARY JEAN BOWMAN Wisconsin analysis concluded that more able college men do not forego more earnings ~an do less able men during early post-secondary years. A second contribution from the Wisconsin study was to provide data about effects of the type of college attended. Coefficients of determination in t~heir previous earnings equations were compared with the~R s in similar equations to which they had added now one, now another, set of interaction terms with categories of college. Although the samples were large, none of the differences yielded significant F ratios. With the interaction problem out of the way, they went on to treat type of college as an intervening variable in a linear status- attainment model. The new findings were impressive. Adding type of college raised coefficients of determination by two-thirds in regressions that included only IQ and family background. The increase was significant even when all variables of the expanded social-psychological model were included in the initial equations. This exercise provided an answer to another question as well; mental ability and SES of their students explained only a third of the variance in mean earnings between types of colleges as classified for this study. The authors supplied a summary table showing unadjusted mean earnings by college type and a parallel tabulation making corrections for ability and background. The usual educational decisions and the association between ability and enjoyment of school. Both common sense and indirect empirical evidence point to the importance of such "noneconomic" factors for the explanation of who continues and who drops out. For brief but pertinent comments on this point see Blaug (1976). Research by Miller (1971) provides some evidence that the more able youth are much less influenced in their educational decisions by the costs of continuing than are the less able. 39Earnings data came from Social Security records; for estimation of foregone earnings, men who had served in the armed forces were excluded. However, a byproduct of this endeavor was some new information on effects on earnings of military service. In addition, clear evidence of common variations in unconventional sequences of work and study emerged. This byproduct underlines the importance of more attention to early years of work. 260 PAGENO="0240" 2860 BOOK REVIEW~ variables for `quality' of. college would be poor predictors of varia~e in earnings by type of college--at least in Wisconsin. Schooliflg, Occu1~tions, and.Scree~ Whatever the observed effects of schooling on earnings may be, our puzzles are not ended. How large a part of those effects can be attributed to the school.~ s improvement in the productive abilities of students? Or, to what degree does schooling act as a device to sort or screen individuals for whom school is less a source of learning than an attestation of traits regarded as desirable by potential employers? This is not the same as the previous query about bias. Adjustments for bias assume merely that whatever a mans schooling, his earnings will be affected by his background and his initial intelligence as well as by what he has learned in school. In its most extreme and unrealistic theoretical form, the screening hypothesis would say that education adds nothing to productive power; it merely sorts imperfectly by ability and by useful personality traits. The following possibilities can be schematized: 1. Education affects earnings wholly through what it does to increase abilities or aptitudes, as we measure them. 2. Education affects earnings entirely through the ways in which it changes people, but our measures of the changes are grossly inadequate. There are two variants: 40Work on college quality by Astiri has been extensive and is well known; much of his work is listed in Astin and Lee (1972, pp. 113-114). Solmon (1973a) analyzed effects of college quality on earnings using the NBER-Thorndike sample, and his broader essay (1973b) is also relevant. On the status of our knowledge (or ignorance) on these questions, see also Psacharopoulos (1974, 1975). Attempts to sort out effects of school or college quality on earnings are included in: Daniere and Nechling (1970); Johnson and Stafford (1973); Uo.rgan and Sirageldin (1968); Wales (1973); Wachte.l (1974); and Weisbrod and Karpoff (1968). 261 PAGENO="0241" 2861 MARY JEAN BOWMAN a. Education increases productive potential for everyone, but we just are not measuring this successfully. b. Schools have perverse, distorting effects on the more disadvantaged individuals, depressing their ambitions and self-images; others (and those who remain longest) are oriented in attitudes and in personality to success. (This theme was first elaborated by Gintis, 1971.) 3. Education acts in large part a screening device. Her~e we have three main variants: growing and diverse literature on the economics of information and job search is involved. Key initial contributions under this heading are Stigler (1962) , Arrow (1972), and Spence (1973, 1974). Most closely tied in with discussions of education in this vein (pro and con) are Riley (1976), Stiglitz (1974, 1975), and Wolpin (1974). Another branch of work concentrates on job search, quits, and lay-of fs; relevant in the present context are McCall (1970), Metcalf (1973), Mortenson (1970, 1974), Rothschild (1973), and Whipple (1973). Related work that links study of quits and lay-of fs with Becker's "firm-specific" training is discussed in Bowman (1974), but the theoretical base in that case is not in the economics of information, except incidentally, and the screening issue is not involved. Most of the briefer commentaries on screening have accepted the new, general theory of the economics of information; problems then center on how the screening theory is specified and on the possibility of empirically identifying the relative importance of the sorting and productivity effects of schools. Primarily in this genre are Adkins (1974), Blaug (1972, 1976), Bowman (1970a), Chiswick (1973), Gordon (1974, pp. 1-26), Layard and Psacharopoulos (1974), Miller and Reissman (1969), Psacharopoulos (1974), Welch (1975), and Wiles (1974). However, these inevitably slide over into other facets of the screening debate as well--whether with regard to treatments of "credentialjsm," in less analytical literature. (exemplified by Berg, 1971), or to 262 78-226 0 - 77 - 16 (Pt. 4) PAGENO="0242" 2862 BOOK REVIEW a. Labor markets are open and there is effective wage competition. However, information is costly. Hence rational employers use s~hooling of an individual as a clue, in order to make better guesses as to which individuals will be most productive--including which will be better investments for employer-paid training (formal or informal). b. As in (a), employers are rational, but there is little wage competition; instead there is queuing for jobs, and one' s rank in ~e queue is determined by his schooling. c. Human resources are allocated in the interests of a managerial elite (sometimes "capitalists"), and schooling is used to sort people out for entry into segmentalized labor markets. (See Reich, Gordon, & Edwards, 1973; Carnoy & Carter, 1974.) If (1) described the true state of affairs, postschool measured ability would entirely eclipse any other effects of schooling upon earnings, since it would capture everything that schooling does to enhance earning power. This is not the way that the regressions have come out. So, coming to (2), what has been omitted from our specifications? The field is wide open for investigation of this question; now we have speculations greatly affected by political beliefs rather than by evidence. consideration of labor market rigidities of one sort or another. 42 The clearest representative is Thurow (1972, 1975) and Thurow and Lucas (1972). Writings by Boudon (1973a, 1973b), by Lane (1975), and by Rawlins and Ulman (1974), are related, but they do not attack the theory of wage competition as does Thurow. Recent studies that examine dynamic adaptive processes in labor markets and in inividual demands for education contrast sharply with Thurow (and with Eckaus, 1964). In addition to Freeman's work, cited earlier, see for example Scovill&s emphasis (1972) on the adaptive redesigning of `jobs and, especially, Dresch (1975). 263 PAGENO="0243" 2863 MARY JEAN BOWMAN Even if some version of (2) is accepted in part, the questions raised in (3) remain important. On this topic also people sort themselves politically into the pseudo-Marxian position (3c) or the more moderate (3a) or (3b). Taubman and Wales are nearest to (3a) in their views on screening. Approach (3a) is affected by recent theoretical work in the economics of information and on the functioning of labor markets under uncertainty. In a world of uncertainty, the sorting activity of schools may be societally useful. The information provided improves allocation of human resources over that which would occur in the absence of such information. Whether from a societal perspective those returns are worth the cost is another question; this would depend partly on how much of what education does is merely screening and on what the education costs. Taubman and Wales draw on this literature, although they do not follow through with it to consider alternative ways of providing information. Neither do they directly confront the question of wage flexibility (3a) versus inelasticities of occupational demand and job queuing (3b). Direct attention to the latter set of problems would seem to be called for, given their focus on occupational ~~rting as the process through which screening takes place. 43Limited intragenerational mobility among firms, and among occupations, is an important fact of life, whatever its cause and whether we attribute it to the cumulation of investments, in the formation of partially-specialized productive capabilities (through schooling and in the post-school years), or to more arbitrary sorts of market forces. Unfortunately, most empirical evidence is highly ambiguous. The questions are old ones, though not previously tied so closely to discussions of education. The notion of "non-competing groups" carries its label from Cairnes (1874) and was in fact earlier. Evidence relating to determinants of high, or low, inter-firm mobility of employees plays a central part in the most modern "human-capital" literature. The concept of "internal labor markets," which has generated much fruitful work following Doeringer and Piore (1971), is in fact entirely consistent with the more general concept of "firm-specific" training in the human-capital literature (Bowman, 1974). Meanwhile, debates over "dualism," or Kerr~s earlier (1954) "Balkanization" of labor markets, or 264 PAGENO="0244" 2864 BOOK REVIEW The goal that Taubman and Wales set f or themselves is a bold one. They undertake to estimate what proportion of observed differences in earnings associated with school~g may be attributed to screening. They compare observed occupational distributions of men from each level of schooling with an expected distribution assuming, the absence of screening. Unfortunately they fail to make explicit the crucial implicit assumption of their construct: that information is costless. A first step in this undertaking was the running of a new set of regressions like those for the entire sample, but this time within each of three groups of occupations. Group I includes professional, technical, and sales occupations. Dummy variables for technical and for sales occupations in 1955 are entered in both the 1955 and the 1969 regressions. Group II is owners and managers. Group III includes blue-collar, lower white-collar, and service jobs. In regressions within Group III, dummy variables are entered for 1955 employment in white-collar and in service occupations. Setting aside questions about screening, results of these analy~es will be of interest as they may throw light on the intraoccupational effects of schooling on earnings (construing groups of occupations broadly). Generally, education had little effect within any of the three groups in 1955. For Group III, effects were very small even in 1969--though larger than in 1955. Key degree-completion points (college graduation, PhD, etc.) were important in the 1969 regressions for Group I. In the 1969 regressions for Group II (owners and managers), college graduation, master's d~fees~ and especially LLB degrees were significant. the newly popular concept of "segmentalized labor markets' continues--of ten, it is to be feared, with more heat than light. For some recent commentaries and critiques see Cain (1975), Psacharopoulos (1976), and Wachter (1974). Both Cain and Psacharopoulos provide extended lists of' references on all sides of this multi-sided set of questions. 44 . The so-called sheepskin effect has often been cited as evidence of the importance of the screening aspect of education, and these findings for the Group I and Group II regressions might seem to underline that argument. 265 PAGENO="0245" 2865 MARY JEAN BOWMAN Given the small proportion of total variance in earnings that was explained by any of their equations, readers may question the meaning of the generalization with which Taubman and Wales sum up their results: that schooling had little effect upon earnings within broad occupational groupings. This statement begs the question (discussed earlier) of the relative importance of between-occupation and within-occupation effects of education on earnings. In order to cut through an elusive set of problems and bits of evidence, Taubman and Wales pose a formal definition of screening (italics theirs): Screenin~ based on educational attainment occurs when because of lack of educational attainment, a ~son is excluded from an ~ ion in which he would have a higher marginal ~roduct or hi~er (discounted) earnings. This definition introduces the idea of different occupations or jobs--a necessary concept because if a persons marginal product and wage rate do not differ across occupations, then he cannot be excluded on the basis of his education from all occupations in which his marginal product would.be highest. (p. 158) To measure the extent of screening, Taubman and Wales compare actual with expected fractions of people in different occupations at various levels of education. They estimate what an individual with specified characteristics could earn in various occupations and then assume that he chooses the one that yields the highest However, evidence seems to be accumulating that rates of return to `~some college'S are higher than those to completion of the undergraduate degree. Such findings are not inconsistent with the relatively strong coefficients on degree-completion found by Taubman and Wales in their 1969 Group I and Group II regressions; in fact, elsewhere in their book Taubman and Wales demonstrate that when adjusted for ability the private rates of return to some college education definitely exceeded those to college completion in their sample. They do not draw on the ~`sheepskin" argument in their discussion of screening. 266 PAGENO="0246" - 2866 BOOK REVIEW income. Further, by assuming `that the potential earnings in an occupation are equal to a person's marginal product in that occupation," they then estimate "the proportion of observed educational earnings differences due to skills produced by education and the portion due to screening." This procedure is carried out ingeniously, with a random disturbance term, to construct the probability distributions that, without screening, an individual of given characteristics would enter one rather than another of seven occupations (the three occupations in Group I, the owner-manager category in Group II,. and the three in Group III listed above). Expected and actual distributions are compared for graduates of high school, tho~e with some college, and those with an undergraduate degree. There are. sharp contrasts between actual and expected distributions. These results are translated, finally, into estimates of the prevalence of screening as follows. First, raw percentage differentials of earnings of men with some college and of those with undergraduate degrees over the earnings of high school graduates were computed for 1955 and 1969. These are the original observations, without adjustments for ability or background. Then, from the newly constructed expected occupational distributions, new percentage differentials are estimated as these would be without screening but with wage rates unchanged. They report these results (p. 171): Expected Actual (who scree~) 1955 1969 1955 1969 Some college 15.2 24.3 5.0 12.5 Undergraduate degree 17.4 42,3 7.4 24.3 In other words, they attribute half of the 1969 percentage differentials between earnings of high-school graduates and of those with college experience to screening. The differentials in 1955 were smaller, but the proportions attributed to screening were even larger. What have they demonstrated? We see an ingenious construction that incidentally provides us with a rough division of education-explained variance in earnings into 267 PAGENO="0247" 2867 NARY JEAN BOWMAN two parts, one that is mediated by occupation and one that is not so.mediated. Nany factors can affect how these effects of education are divided up. In part, screening is no doubt involved--perhaps more in Sweden than in the United States. But the results can be designated as evidence for screening only by assumptions about the processes that have been at work. Taubman and Wales do not tell the reader just how they envisage screening distributes people with varying schooling among the occupations. They may sometimes be thinking of job queuing, but they waver on the topic of wage flexibility. Their estimation process implicitly treats wages as determined independently of any shifting inthe occupational structure. Yet their construct allows shifts `in that structure to occur without restraint, while assuming at the same time that wages do measure marginal productivity. Abstract models are serviceable, but the Taubman-Wales version is i:iternally inconsistent. They do not escape their theoretical dilemma by acknowledging that the occupational redistribution they invoke in their model would in fact entail alterations of wages. But let us turn back to a rougher, pragmatic view of what they did. The earnings in the Taubman and Wales regressions, in those of F~gerlind, and in the analyses of the Wisconsin team are in part formed by the demand conditions of the labor markets in which the men they were studying sought and found jobs. Can we realistically imagine a job restructuring of the economy so great as the Taubman-Wales manipulations imply? What if they extended their analysis to a more representative sample of the national male population (women aside)? How much `give" is there in the structure of occupations at any time? How does that structure change and under what impetus? Nany sociological studies of social mobility have raised such questions, and such queries do set the broader context within which studies the status-attainment process must be interpreted. 45 . Boudon (1973a, 1973b) used a probability queuing model that assumes a fixed occupational s,tructure to simulate the effects of expanding education on the. occupational-status distribution of men classified by social background and by education. Lane (1975), on the other hand, assumes a simple queuing process by which the best educated are absorbed into the best jobs in rank 268 PAGENO="0248" 2868 BOOK REVIEW Economists are equally concerned with the balance of demand and supply of variously educated and experienced workers, as with the dynamics of shifts in structures of occupations. Taubman and Wales can hardly expect to have their final manipulations of the occupational structure taken seriously when they stop short of asking how the changed, overall distributions of occupations that would be required to realize their expected distribution would be accommodated by the economy. order (a strong version of the job-queuing models), again in an attempt to assess effects of education in a statically structured economy. In a critical review of Boudon, Hauser (1976) attacked primarily the failure to use logit analysis in Boudon's discussions of occupational-status shifts; however, Boudon was working with an "ideal-typical" model for theoretical purposes. (On this see Boudon, 1976.) Boudon, like Anderson (1961), stresses the importance of the unexplained variance, even in occupational status; his book is not directed to the screening issue, but it could be viewed as an interpretation of societal processes that is almost the opposite of that in Taubman and Wales. For an analysis of the dynamic processes of diffusion of schooling and a critique of assessments of progress in the equalization of educational attainments by social class, see Anderson (1975); he uses logit methods for the reexamination of the Swedish performance over the past ~generation. 269 PAGENO="0249" Main Antecedent and Contemporary Worka FBgerl md (Conversion of Environmental and Personal Resources into Occupational Status Earnings) Hus~n, 1951. Huse'n, Emanuelsson, F~ger1ind, & Liljefors, 1969. Coleman, 1971. Jencks et al., 1972. Duncan, Featherman, & Duncan, 1972. Articles by author with associates; others have been: Bulcock, Emanuelsson. Main related work: Duncan; Griliches & Mason; Hauae. Sewell and Hauser (The Process of Status Achievement in Education, Occupation, and Earnings) Articles by authors and their associates; others have been: Alwin; Armer; Haller; Ohlendorf; Portes; Shah. Main related work: Duncan; Alexander; Eckland; Spaeth; Coleman. Taubman and Wales (Effects of Education on Economic Productivity) Basic human-capital analyses: Becker, 1964/1975; Mincer, 1974. On economic returns and ability: Bowles (alone and with others); Griliches (alone and with others); Hause; Solmon; Weisbrod; Welch. Screening and job queuing: Arrow; Spence; Thurow. aTh~S list includes only the most closely and by others whc~ influenced them or whom they books only. See reference list under names indicated. t~) t~) ~J -~J Blau and Duncan, 1967. Duncan, Featherman, & Duncan, 1972. Hauser, 1971. CD o ~< 0 related prior work by the authors challenge. Dates are entered for PAGENO="0250" 2870 MARY JEAN BOWMAN 272 PAGENO="0251" 2871 BOOK REVIEW Appendix B Specific Questions and Issues Addressed Sewell Taubman Fâgerlind and Hauser and Wales Relationships among background, ability, and education 1. Relationships between X X background and ability. 2. Effects of background and X X of ability on education. 3. Effects of education on X ability. 4. Interaction between X background and ability effects on education. Determinants of occupational status 5. Education as a mediator X X between background and occupation, early years. 6. Mediated and direct effects X X of specified background traits on occupational status, early years. 7. Replication of questions X (5.) and (6.), later years (up to age 43). Determinants of earnings 8. flediated and direct effects X X of education and of ability on earnings (occupational status as a mediator). 9. Mediated and direct effects X X of specified background traits on earnings. 10. Interactions between X postschool mental test and occupational status in effects on earnings. 273 PAGENO="0252" 2872 MARY JEAN BOWMAN Sewell Taubman Fägerlind and Hauser and Wales Determinants of earnings 11. Interactions between X education and occupational status in effects on earnings. 12. Estimates of biases in X X coefficients on educational differences in earnings. 13. Interactions between X X education and ability in effects on earnings.. 14. Comparisons between X X earnings equations for later and early years. 15. Construction of age- X X earnings profiles. 16. Prediction of later earnings X from residuals in regressions for early years. Other special features 17. Effects of using ACLEV X (educational achievement) versus EDUC (years of school completed) as the education indicator; all relevant relationships. 18. Effect of type or quality X of college on earnings. 19. Examination of earnings X foregone by college students. 20. Examination of social- X psychological variables in status achievement. 21. Effacts of using different X ability indicators on simple correlation of ability and earnings. 22. Within occupation (major X group) earnings regressions. 23. Use of an occupation- . X earnings test of the "screening" hypothesis. 274 PAGENO="0253" Principal Population Studied and Nature of the Data 1. Base population and sample 2. Data on income of study population Pupils in the third grade of schools of Halmd, Sweden (normally 10 years old) in 1938, entire universe of males included. Very slight ability or socio-economjc bias in follow-up (93% of survivors in 1963 and 95% in 1969. Of remain(~ r about 2% knowh to be emigrants). Earnings at ages 24 to 43 (1953, 1958, 1963, 1968, and 1971). Official infor- mation from tax registers, available on every person. Sewell, Hauser, and Featherman Wisconsin high school seniors of 1957; sample used is for non-farm males not in school and employed in the civilian labor force in 1964. Slight ability or socio- economic bias (88% response on follow-up in 1964). Earnings at ages 27-29 (1965-67) from Social Security Administration confidential records; adjusted for effects of multiple job holding and the ceiling on covered earnings. Supplementary data from Wiscon- sin income tax files. Taubman and Wales Sample of accepted volunteers for pilot, navigator, and bombardier training programs; Army Air Corps, World War II Above the median high school graduate on AFQT score; selection by choice into program; further upward bias in the 1969 responses. 1955 monthly salary as reported by Thorndike and Hagen questionnaire at that time; 1969 earnings on principal job (annual full- time rate) as reported on NBER follow-tm questionnaire. 3. Data on occupations of respondents Dates as for earnings. Hail questionnaire (sample traced through facilities of public record system): classified in ordinal cate- gories on 6-point scale. For study of foregone earnings: social security records 1957-1961. 1964 follow-up sample survey. Occupations scaled in Duncan SEI units, on the 3-digit census categories. Hajor occupation categories: 1955 from the Thorndike- Hagen and 1969 from NBER follow-up questionnaires. F~gerlind N.) I~~ 0 0 ~ tx~ CA~ PAGENO="0254" Fdger lind From 1963 questionnaire. Two scales used: a) number of years completed (ED(JC, a 4-point scale); b) educa- tional achievement level. (ACLEV, a 6-point scale). 1938: Flallgren group IQ, administered in third grade. 1948: military intelligence test (universal for males). 6. Father's education From 1938 data. Scaling similar to' ACLEV for pupils, but adapted to parential cohort. 7. Father's occupation See SES Sewell, Itauser, and Feathermah 1964 follow-up questionnaire; years of school beyond high school. Percentile score.s on Ilenmon- Nelson test of Nental Ability 1957. Initial 1957 survey, reported by students. Coded as years of school completed From Wisconsin tax return for 1957. Coded in Duncan SEI units. Factor analysis of 17 Air Force tests administered in 1943. Identified four factors: 1. mathematical 2. complex coordination 3. "IQ" (especially reading comprehension and mechanical principles) 4. Spatial orientation (and speed of identification). Dummy variables: father attended high school and father attended college. (Army Air Corps data, 1943) Hother's education Parental income See SES. (Parental income data available but not used in this book; used in prior article uith associates). As father's education Parents' average income 1957-60, from Wisconsin tax returns. Experimented' also, with data from same source, distinguishing father's and mother's income. 10. Parental SES Composite constructed in 1938 from data on father's occupa- tion, 1937 family income, number of children, appearance in welfare registry and on criminal records. Data not used in composite form 4. Data on education of respondents 5. Data on ability, aptitude, etc. Taubman and Wales Post-high school categories, from 1955 and 1969 follow-up questionnaires, used as set of dummy variables. N.) a. 9. C PAGENO="0255" 11. Siblings (or Children under 16 living family size at home (including foster); 1938 population registers. 12. Rank in class 1957 school report. 13. College plans, 1957 responses of students. occupational aspirations 14. Student perceptions 1957 responses of students. of influence of teachers, parents, and friends 15. Types of college Specific information obtained attended by college in 1964 survey. ~ 16. flhlitary service (~filitary service is From 1964 survey. A military sample in World universal). tlar II tT~ ~ Oi tzj PAGENO="0256" 2876 NARY JEAN BOWMAN 278 PAGENO="0257" 2877 BOOK REVIEW References Adkins, D. L. The American educated labor force: An empirical look at theories of its formation and composition. In U. S. Gordon (Ed.), i~ier education and the labor market. New York: UcGraw- Hill, 1974. --______ Alexander, K. L., & Eckland, B. K. Effects of education on the social mobility of high school sophomores fifteen years later (1955-1970). Final Report on Project No. 10202, N.I.E. Grant No. OEG-4-71-0037, 1973. Alexander, K. L., & Eckland, B. K. Sex differences in the educational attainment process. American Sociol~gi~al Review, 1974, 39, 668-682. Alexander, K. L., & Eckland, B. K. Basic attainment processes: A replication and extension. Sociolog~ of Education, 1975, 48, 457-495. (a) Alexander, K. L., & Eckland, B. K. School experience and status attainment. In S. E. Dragastin & G. H. Elder (Eds.), Adolescence in the life ~Lcle. New York: Halsted, 1975. (b) Alexander, K. L., Eckland, B. K., ,& Griffin, L. J. The ~Jisconsin model of socioeconomic achievement: A replication. American Journal of Sociology, 1975, 81, 324-342. Alwin, D. F., & Hauser, R. 11. The decomposition of effects in path analysis. American Sociolo~4çal Review, 1975, 40, 37-47. Anderson, C. A. A skeptical note concerning the relation of vertical mobility to education. American Journal of Soc iologj, 1961, 66, 560-570. Anderson, C. A. Expanding educational opportunities: Conceptualization and measurement. ~4gher Education, 1975, 4, 393-408. Anderson, C. 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Human caj~tal and the o~ distri~u~c~.a of income: An ana2~ical approach (Woytinsky Lecture No. 1). Ann Arbor: University of Michigan, Institute of Public Administration and Department of Economics, 1967. Becker, G. S. Comment on S. Bowles, "Schooling and inequality from generation to generation." Journal of Political Economy, 1972, 80(3), S252-S255. Berg, I. Education and j~~: The great train~~ robberl. New York: Praeger, 1971. Blau, p. M., & Duncan, 0. D. The American o~~ip~tiopal structure. New York: Wiley, 1967. Blaug, N. The correlation between education and earnings: What does it signify? Higher Education, 1972, 1, 53-76. Blaug, N. Th~ ~pjrical status of human ca~p4~al th~y: A survej~. Unpublished manuscript, University of London, Institute of Education and London School of Economics, 1976. Blum, Z. D. White and black careers during the first decade of labor force experience, Part II: Income differences. Social Science Research, 1972, 1, 271-292. Boudon, R. Education et mobilitL Sociologie et Societes, 1973, 5, 111-125. (a) Boudon, R. Education, ~tuni~y and social ~ New York: Wiley, 1973. (b) Boudon, R. Comment on Hauser's review of education, opportunity, and social inequality. American Journal of Sociolqgy~, 1976, 81, 1175-1187. Bowiby, R. L., & Schriver, W. R. Academic ability and rates of return to vocational training. Industrial and Labor Relations Review, 1973, 26, 980-990. Bowles, S. Towards an educational production function. 280 PAGENO="0259" 2879 BOOK REVIEW In W. L. Hanson (Ed.), Education, income and human ~p~al. New York: National Bureau of Economic Research, 1970. Bowles, S. Schooling and inequality from generation to generation. Journal of Political Econom1, 1972, 80, S219-S251. (a) Bowles, S. Unequal education and the reproduction of the social division of labor. In M. Carnoy (Ed.), Schooj4~ in a £~p~rate ~ New York: David McKay, 1972. (b) Bowles, S. Understanding unequal economic opportunity. American Economic Review, 1973, 63, 346-356. Bowles, S., & Nelson, V. The "genetic inheritance of I.Q." and the intergenerational reproduction of economic inequality. Review of Economics and Statistics, 1974, 61, 39-51. Bowman, H. J. The assessment of human investments as growth strategy. In Federal p~~grams for the ~y~p~ent of human resources (Joint Economic Committee, 90th session). Washington, D.C.: U.S. Government Printing Office, 1968. Bowman, H. J. Education and economic growth. In R. L. Johns, I. J. Goffman, K. Alexander, & H. S toller (Eds.), Economic factors affec~4~ the financing of education. Gainesville, Fla.: National Educational Finance Project, 1970. (a) Bowman, H. J. Mass elites on the threshold of the 1970's. ~~p~~tive Education, 1970, 6, 141-160. (b) Bowman, H. J. Selective remarks and some dicta. In L. C. Solmon & P. J. Taubman (Eds.), Does c~j~j~ matter? New York: Academic Press, 1973. Bowman, H. J. Learning and earning in the postschool years. In F. N. Kerlinger & J. B. Carroll (Eds.), Review of research in education (Vol. 2). Itasca, Ill.: Peacock, 1974. Bulcock, J. W., F~gerlind, I., & Emanuelsson, I. Education and the socioeconomic *career: U.S.-Swedish çp~parisons (Report No. 6). Stockholm, Sweden: University of~ Stockholm, Institute for the Study of International Problems in Education, 1974. (a) Bulcock, J. W., Fdgerlind, I., & Emanuelsson, I. Education and the socioeconomic career II: *A model of the * resource conversion j~r~erties of famil1, school, and o~~ç~pational environments (Report No. 10) Stockholm, Sweden: University of Stockholm, 281 PAGENO="0260" 2880 NARY JEAN BOWMAN Institute for the Study of International Problems in Education, 1974. (b) Cain, G. G. The challenge of dual and radical theories of the labor market to orthodox theory. American Economic Review, 1975, 65, 16-22. Cairnes, J. E. Some lead i~g pr incip~e~ of p2~itical ec~~y. London: Harpers, 1874. Carnoy, N., & Carter, M. A. Theories of labor markets and worker ~ Menlo Park, Calif.: Portola Institute, August 1974. Chamberlain, G., & Griliches, Z. Returns to schoolin~gof brothers and ab ilitj~ as an unobserva varia~ component (Discussion Paper No. 340). Cambridge, Mass: Harvard Institute of Economic Research, 1974. Chiswick, B. R. Schooling, screening and income. In L. C. Solmon & P. J. Taubman (Eds.), Des colle~g~ matter? New York: Academic Press, 1973. Chiswick, B. R. The distribution of income. New York: National Bureau of Economic Research, 1974. Chiswick, B. R., & Mincer, J. Time series in personal income inequality in the United States from 1939, with projections to 1985. Journal of Political Economy, 1972, 80(2), S34-S66. Christensen, S., Melder, J., & Weisbrod, B. A. Factors affecting college attendance. Journal of Human Resources, 1975, 10(2), 139-155. Coleman, J. S. Resources for socialchahge. New York: Wiley-Interscience, 1971. Coleman, J. S., Campbell, E. Q., Hobson, C. J., McPartland, J., Mood, A. M., Weinfeld, F. D., & York, R. L. Equality of educational ~pportuni~. Washington, D.C.: U.S. Department of Health, Education and Welfare, Office of Education, 1966. Coleman, J. S., Berry, C. C., & Blum, Z. D. White and black careers during the first decade of labor force experience, Part III: Occupational status and income together. Social Science Research, 1972, 1, 293-304. Coleman, J. S., Blum, Z. D., Sorenson, A. A., & Rossi, P. N. White and black careers during the first decade of labor force experience, Part I: Occupations. Social Science Research, 1972, 1, 243-270. Conlisk, J. A bit of evidence on the income-education- 282 PAGENO="0261" 2881 BOOK REVIEW ability interrelation. Journal of Human Resources, 1971, 6, 358-362. Daniere, A., & Mechling, J. Direct marginal productivity of college education in relation to college aptitude of students and production costs of institutions. Journal of Human Resources, 1970, 5, 51-70. Denison, E. F. Sources of economic &rowth in the United States. (Supplementary Paper No. 13). New York: Committee for Economic Development, 1962. Denison, E. F. Measuring the contribution of education to economic growth. In ?J~ ~ factor and economic ~ Paris: OCED, 1964, pp. 3-55; 7 7-102. Denison, E. F. ~ ~pwth rates differ. Washington, D.C.: Brookings Institution, 1967. Denison, E. F. Account in~ for Uni ted States economic ~owth, 1923-69. Washington, D.C.: Brookings Institution, 1974. DeWolff, P., & Van Slijpe, A. R. D. The relation between. income, intelligence, education, and social background. Europ~ Economic Review, 1973, 4, 235-264. Doer inger, B. P. & Piore, H. Internal labor markets and ma~p~~r analysis. Lexington, Mass.: Heath Lexington, 1971. Douglas, J. W. B., Ross, J. H., & Simpson, Fl. R. Allour futures: A longitudinal ~ of secondary education. London: Peter Davies, 1968. Dresch, S. Demography, technology, and higher education: Towards a formal model of educational adaptation. Journal of Political Econoj~, 1975, 83, 535-569. Duncan, B. ~4l factors and school d~p~uts: 1920-1960 (Cooperative Research Project No. 2258). Ann Arbor: University of Michigan, U.S. Office of Education, 1965. Duncan, 0. D. A socio-economic index for all occupations. In A. J. Reiss, Jr. (Ed.), Occupations and social status. New York: Free Press, 1961. Duncan, 0. D. Path analysis: Sociological examples. American Journal of ~ 1966, 72, 1-16. Duncan, 0. D. Ability and achievement. ~~enics Quarte~~, 1968, 15, .1-11. Duncan, 0. D. Contingencies in constructing causal models. In E. F. Borgatta (Ed.), Sociolo~4cal ~ San Francisco: Jossey-Bass, 1969. 283 PAGENO="0262" 2882 NARY JEAN BOWMAN Duncan, 0. D. Path analysis: Sociological examples (addenda). In H. H. Blalock, Jr. (Ed.), Causal models in the social sciences. Chicago: Aid me Atherton, 1971. Duncan, 0. D., & Featherman, D. L. Psychological and cultural factors in the process of occupational achievement. Social Science Research, 1972, 1, 121-145. Duncan, 0. D., Featherman, D. L., & Duncan, B. Socioeconomic bac~round and achievement. New York: Seminar Press, 1972. Duncan, 0. D., Halles, A. 0., & Portes, A. Peer influences on aspirations. A reinterpretation. American Journal of Sociology, 1968, 74(2), 119-137. Duncan, 0. D., & Hodge, R. W. Education and occupational mobility. American Journal of Soc iol~gv~, 1963, 68, 629-644. Eckaus, R. S. Economic criteria for education and training. Review of Economics and Statistics, 1964, 46, 181-190. Eckland, B. K. Academic ability, higher education, and occupational mobility. American Sociol~g~çal Review, 1965, 30, 735-746. Featherman, D. L. The socioeconomic achievement of white religio-ethnic subgroups: Social and psychological explanations. American Socio1o~ical Review, 1971, 36, 207-222. Featherman, D. L. Achievement orientations and socioeconomic career attainments. American Sociological Review, 1972, 37, 131-143. Featherman, D. L., with the assistance of R. H. Hauser and W. H. Seweil. Toward comparable data on inequality and stratification: Perspectives on the second generation of national mobility studies. L~ American Sociolo~ist, 1974, 9(2), 18-25. Freeman, R. The market for colleg~ trained manpower. Cambridge: Harvard University Press, 1971. Freeman, R. The changing labor market for members of minority-groups. In M. S. Gordon (Ed.), ~~her education and the labor market. New York: McGraw-Hill, 1974. Freeman, R. The declining economic value of higher education and the American social system. Paper prepared for the Aspeti Institute for Humanistic 284 PAGENO="0263" 2883 BOOK REVIEW Studies, Conference on Education in a Changing Society, June 1975. (a) Freeman, R. Overinvestment in college training? Journal of Human Resources, 1975, 10, 287-311. (b) Gintis, H. Education, technology, and the characteristics of worker productivity. American Economic Review, 1971, 61 Proceedings, 266-279. Gordon, H. S. (Ed.). ~ education ~ ____ market (Essays sponsored by the Carnegie Commission on Higher Education). New York: HcGraw-Hill, 1974. Griliches, Z. Notes on the role of education in production functions and growth accounting. In W. L. Hanson (Ed.), Education, income, and human ca~pital. New York: National Bureau of Economic Research, 1970. Griliches, Z. Estimating returns to schooling: Some econometric problems. Presidential address at the *meeting of the Econometric Society, Toronto, 1975. (Mimeo, Harvard University, 1975.) Griliches, Z., & Hason, W. H. Education, income and ability. Journal of Political Econorny, 1972, 80(3), S75-S103. Hailer, A. 0., & Portes, A. Status attainment processes. Sociology of Education, 1973, 46, 51-91. Hansen, W. L., Weisbrod,B. A., & Scanlon, W. J. Schooling and earnings of low achievers. American Economic Review, 1969, 60 Proceedings, 409-419. Haug, II. R., & Sussman, N. B. The indiscriminate state of social class measurement. Social Forces, 1971, 49(4), 549-563. (With commentary by A. B. Hollingshead, pp. 563-567, and reply by Haug & Sussman, pp. 568-569) Hause, J. C. Earnings profile: Ability and schooling. Journal of Political Econo~y, 1972, 80(2), S108-S138. Hause, J. C. The covariance structure of earnings and the on-the-job training hypothesis. (Working Paper No. 25). Palo Alto, Calif.: National Bureau of Economic Research, Center for the Economic Analysis of Human Behavior and Social Institutions, 1973. Hause, J. C. The risk element in occupational and educational choices: A comment. Journal of Political o~ç~y, 1974, 82, 803-807. Hause, J. C. Ability and schooling determinants of 285 PAGENO="0264" 2884 NARY JEAN BOWMAN lifetime earnings. In F. T. Juster (Ed.), Education, income, and human behavior. New York: National Bureau of Economic Research, 1975. Hausèr, R. M. Socioeconomic background and educational performance. (Arnold and Caroline Rose Monograph Series in Sociology). 1971. Ilauser, R. M. Socioeconomic ~~round and differential returns to education. In L. C. Solmon & P. J. Taubman (Eds.), Does coll~e matter? New York: Academic Press, 1973. (a) Ilauser, R. 11. Disaggregating a social-psychological model of educational attainment. In 0. D. Duncan & A. S. Goldberger, (Eds.), Structural eq~ation models in the social sciences. New.York: Academic Press, 1973. (b) Hauser, R. M. Review essay on Boudon's model of social mobility. American Journal of Sociology, 1976, 81(4, Jan.), 911-928. Hauser, R. H., Dickinson, P. J., Travis, H. P., & Koffel, J. N. Structural changes in occupational mobility among men in the United States. American Sociological Review, 1975, 40, 585-598. Heise, D. R. Problems in path analysis and causal inference. In E. F. Borgatta (Ed.), Sociological methodolqgy~. San Francisco: Jossey-Bass, 1969. Henle, P. Exploring the distribution of earned income. Mon th~ Labor Review, 1972, 95, 16-27. Hus~n, T. Beg~vning och mi1j~. Stockholm: Victor Pettersons Bokindustriaktiebolag, 1951. Hus~n, T. Talent, ~pportunity and career. Stockholm: Almqvist & Wiksell, 1969. Jencks, C., Smith, H., Ackland, H., Bane, H. J., Cohen, D., Gintis, H., Heyns, B., & Michelson, S. ~~uality:. A reassessment of the effect of family and schooling in America. New York: Basic Books, 1972. Johnson, G. E., & Stafford, F. P. Social returns to quantity and quality of schooling. Journal of Human Resources, 1973, 8, 139-155. Kelley, J. Causal chain models for the socioeconomic career. American Sociological Review, 1973, 38, 481-493. Kerr, C. The Balkanisation of labor markets. In E. W. Bakke (Ed.), Labor mobili~y and economic ~pportunity. Cambridge, Mass.: HIT Press, 1954. 286 PAGENO="0265" 2885 BOOK REVIEW Land, K. C. Principles of path analysis. In E. F. Borgatta (Ed.), Sociological rnethodol~~. San Francisco: Jossey-Bass, 1969. Lane, A. The occupational achievement process 1940-1949: A cohort analysis. American ciolo~ical Review, 1975, 40, 472-482. Layard, P. R. G. On measu~ the red is tribut ion of lifetime income. Paper presented to the International Economic Association, Conference on the Economics of Public Services, Turin. (Mimeo, London School of Economics, 1974.) Layard, P. R. G., & Psacharopoulos, G. The screening hypothesis and the returns to education. Journal of Political Economy, 1974, 82, 985-998. Lillard, L. Human capital life cycle of earnings models: A specific solution and estimation (Working Paper No. 4). New York: National Bureau of Economic Research, 1973. Lydall, H. The structure of earnings. Oxford: Clarendon Press, 1968. McCall, J. J. Economics of information and job search. ~~arte~y Journal of Economics, 1970, 84, 113-126. Mann, A., & Psacharopoulos, G. Schooling and income distribution. (Nimeo, London School of Economics, 1974.) Mayhew, A. Education, occupation and earnings. Industrial and Labor Relations Review, 1971, 24(2), 216-225. Metcalf, D. Pay dispersion, information and returns to search in a professional labor market. ~ of Economic Studies, 1973, 40, 491-506. Miller, L. S. Demand for ~her education in the United States. Stony Brook, N.Y.: State University of New York, Economic Research Bureau, 1971. Miller, S., & Reissman, F. The credential trap. In S.. Miller & F. Reissman (Eds.), Social class and social p~icy. New York: Basic Books, 1969. Mincer, J. The distribution of labor incomes: A survey with special references to the human capital approach. Journal of Economic Literature, 1970, 8, 1-26. Mincer, J. Education, experience and the distribution of earnings and employment: An overview. In F. T. Juster (Ed.), Education, income, and human behavior. New York: National Bureau of Economic Research, 1974. (a), 287 PAGENO="0266" 2886 NARY JEAN BOWMAN Mincer, J. Schoo1in~, experience and earnip~gs. Ne;~ York: National Bureau of Economic Research, 1974. (b) Morgan, J. N., & Sirageldin, I. 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Career thresholds: A longitudinal ~y of the educational and labor market ~periences of male y~ith (Vol. 1, Manpower Research Monograph No. 16). Washington D.C.: U.S. Department of Labor, 1970. Porter, J. N. Race, socialization and mobility in educational and early occupational attainment. American Sociological Review, 1974, 39, ~303-316. Psacharopoulos, G. Returns to education. New York: Elsevier, 1973. Psacharopoulos, G. College quality as a screening device. Journal of Human Resources, 1974, 9, 556-557. Psacharopoulos, G. Earni~ and education in O.E.C.D. countries. Paris: Organization of Economic and Cultural Development, . 1975. Psacharopoulos, G. Labour market segmentation and income distribution. Unpublished manuscript, London School of Economics, 1976. Rawlins, V. L., & Ulman, L. *The utilization of college trained manpower in the United States.. In 288 PAGENO="0267" 2887 BOOK REVIEW M. S. Gordon (Ed.), HWier educe tion in the labor market, New York: McGraw-Hill, 1974. Reich, H., Gordon, D. M., & Edwards, R.' C. A theory of labor market segmentation. American Economic Review, 1973, 63, 359-365. Riley, J. G. Information, screening and human capital. American Economic Review, 1976, 66 Proceedings, 254-260. Rogers, D. C. Private rates of return to education in the United States: A case study. Yale Economic Essays, 1969, 9, 88-134. Rosen, S. Human ~pita1: A survey of e~pirical research. Paper presented at the meeting of the Econometric Society, Toronto, August 1975. (Revised version, University of Rochester, 1976.) Rothschild, H. Models of market organization with imperfect information: A survey. Journal of Political Econ~, November/December 1973, 1283-1308. Schiller, B. R. Stratified opportun,ities: The essence of the vicious circle. American Journal of Sociology, 1970, 76, 426-442. Schultz, T. W. Capital formation by education. Journal of Political Econ~~m\~, 1960, 67, 571-583. Schultz, T. W. Investment in human capital. 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American Journal of Agricultural Economics, 1972, 54, 851-861. Sewell, W. H., & Shah, V. P. Socioeconomic status, intelligence and the attainment of higher education. Sociolo~ of Education, 1967, 40, 1-23. Sewell, W. H., & Shah, V. P. Social class, parental encouragement and educational aspirations. American Journal of Soc iolo~, 1968, 73, 559-572. (a) Sewell, W. H., & Shah, V. P. Parents' education and childrens' educational aspirations and. achievements. American Sociological Review, 1968, 33, 191-209. (b) Smyth, J. A. Utility and the social order: The axiological problem in sociology. British Journal of Sociology, 1971, 22, 381-394. Solmon, L. C. The definition and impact of college quality. In L. C. Solmon & P. J. Taubman (Eds.), Does college matter? New York: Academic Press, 1973. (a) Solmon, L. C. Schooling and subsequent success: The influence of ability, background and formal education. In L. C. Solmon & P. J. Taubman (Eds.), Does college matter? New York: Academic Press, 1973. (b) Spaeth, J. L. Towards a general theory of the attainment process. In W. H. Sewell, R. M. Hauser, & D. L. Featherman (Eds.), Schooling and achievement in American socie~y. New York: Academic Press, 1976. Spaeth, J. L., & Greeley, A. H. Recent alumni and higher education. New York: McGraw-Hill, 1970. Spence, M. Job market signaling. Quarterl~y Jour.nal of Economics, 1973, 87, 355-379. Spence, R. H. Market ~4~na1j~~. Cambridge, Mass.: Harvard University Press, 1974. Stigler, G.. J. Information in the labor market. Journal of Political Economjr, 1962, 70, 94-105. Stiglitz, J. E. The demand for education in public and private school systems. Journal of Public Economics, 1974, 3, 349-385. Stiglitz, J. E. The theory of "screening," education and the distribution of income. American Economic Review, 1975, 65, 283-300. 290 PAGENO="0269" 2889 BOOK REVIEW Taubman, P. J., & Wales, T. The inadequacy of cross-section age-earnings profiles when ability is not held constant. Annals of Economic and Social Measurement, 1972, 1, 363-368. (a) Taubman, P. J., & Wales, T. ~ental abi±~y and higher educational attainment in the 20th centu~ (Occasional Paper 118). New York: National Bureau of Economic Research, 1972, 95-123. (b) Taubman, P. J., & Wales, T. Higher education, mental ability and screening. Journal of Political Economy~ 1973, 81, 28-55. Taubman, P. J., & Wales, T. Education as an investment and screening device. In F. T. Juster (Ed.), Education, income, and human behavior. New York: McGraw-Hill, 1974. . (a) Thurow, L. Education and economic equality. The Public Interest, 1972, 28(summer), 66-81. Thurow, L. Generatj~ jut. New York: Basic Books, 1975. Thurow, L., & Lucas, R. E. B. The American distribution of income: A structural problem. Washington, D.C.: Joint Economic Committee, 1972. Wachtel, P. The returns to investment in education: Another view.. In F. T. Juster (Ed.), Education, income, and human behavior. New York: McGraw- Hill, 1974, pp. 151-170. Wach ter, M. L. ~ and ~ labor markets: A ~ of the dual a~p~pach (Brookings Paper on Economic Activity No. 3). Washington, D.C.: Brookings Institution, 1974. Wales, T. V. The effect of college quality on earnings: Results from the NBER-Thorndike data. Journal of Human Resources, 1973, 8, 306-317. Weisbrod, B., & Karpoff, P. Monetary returns to college education, student ability, and college quality. Review of Economics and Statistics, 1968, 50(4), 353-358. Weiss, Y. The risk element in occupational and educational choices. Journal of Political Econom~y, 1972, 8, 1203-1213. Welch, F. Relationships between income and schooling. In F. N. Kerlinger & J. B. Carroll (Eds.), Review of Research in Education (Vol. 2). Itasca, Ill.: Peacock, 1974. Welch, F. Human capital theory: Education, discrimination 291 PAGENO="0270" 2890 MARY JEAN BOWMAN and life cycles. American Economic Review, 1975, 65 Proceedings, 63-73. Whipple, D. A generalized theory of job search. Journal of Political Econom~, 1973, 81, 1170-1188. Wiles, P. The correlation between education and earnings: The external-test-not-content hypothesis (ETNC). Higher Education, 1974, 3, 43-58. Wise, D. Academic achievement and job performance. American Economic Review, 1975, 65, 350-366. Wolpin, K. Education, screening and the demand for labor of uncertain quality. Unpublished doctoral dissertation, City University of New York, 1974. Young, H. The rise of the meritocraqy. London: Thames & Hudson, 1958. 292 PAGENO="0271" 2891 [Subsequently, the following communication from the Civil Service Commission was received and ordered placed in the record:] PAGENO="0272" 2892 UNITED STATES CIVIL SERVICE COMMISSION psost ,svs,To BUREAU OF RECRUITING AND EXAMINING ESV: VET WASHINGTON D.C. 20415 18 MAY ~976 Mr. Guy H. McMichael III General Counsel Committee on Veterans' Affairs United States Senate Washington, D.C. 20510 Dear Mr. McMichael: We are writing for the Committee's favorable consideration of a proposal to modify the publication requirement under section 403 of P.L. 93-508 (codified as section 2014(d) title 38, U.S. Code). Specifically, we propose publishing one annual narrative report of agency activities to promote the employment and advancement ~of dis- abled and Vietnam era veterans, in lieu of the semiannual reports presently required. We would supplement the annual report with semiannual publications of statistics which would monitor the results of the agencies' efforts. The purpose of the proposal is to ease the agencies' heavy reporting load. Presently, we are requiring agencies to submit reports on disabled veterans 3 times each year; once as part of an affirmative action plan required under section 501(b) of P.L. 93-112 (87 stat. 391) and section 403 of P.L. 93-508 (2014(c) title 38, U.S. Code: and twice more as required under the subsequent section of P.L. 93-508 which reads, in part: (section 2014(d) title 5 U.S. Code): ". . .The Commission shall periodically obtain and publish (on at least a semiannual basis) reports on such implementation and activities from each department. ..including specifica- tion of the use and extent of.. .LVeterans' Readjustment Appointments!.. .and the results of_the.. .Laffirmative action plans for disabled veterans!." Our proposal is to continue receiving the affirmative action plans unchanged, which are annual submissions each March 31st to cover a reporting year which begins April 1 and ends on that day. We would THE MERIT SYSTEM-A GOOD INVESTMENT IN GOOD GOVERNMENT PAGENO="0273" 2893 2 establish the same reporting year and reporting date for an annual narrative publication on disabled veterans and VEV's, and supplement that narrative report with semiannual statistical reports. The statistics would be assembled from monthly reports which we already receive but which would be expanded to include disabled veterans. This modification would permit the agencies to concentrate just once per year on gathering information to be used for reporting on both the affirmative action plans for. the handicapped and disabled veterans, and on the narrative activities report covering disabled and Vietnam era veterans. The rest of the year could be devoted to furtherance of the programs. We have querried ten of the larger Government agencies for their opinion of our proposal and the response was universal agreement. If you wish, the Director of the Office of Veterans' Employment Programs, Mr. Joseph LeNasurier, will be pleased to meet with you at your convenience to clarify and elaborate on any aspect of this proposal. Sincerely yours, Qi~s~' n W. Fossum Acting Director 78-226 0 - 77 - 18 (Pt. 4) PAGENO="0274" 2894 [Subsequently, amendment No. 2005 to S. 969 was introduced and referred to the Committee. That amendment and related materials follow:] [From the Congressional Record-Senate, Friday, July 2, 19761 S. 969-VETERANS' EDUCATION AND EMPLOYMENT ASSISTANCE ACT, AMENDMENT No. 2005 Mr. HARTKE. Mr. President, today I submit an amendment in the nature of a substitute to S. 969 to be known as the Veterans' Education and Employment Assistance Act of 1976. This amendment, which consists of seven titles, is the third major legislative initiative designed to improve and expand the VA educational assistance program since I assumed the chairmanship of the Com- mittee on Veteran's Affairs in 1971. First was the 1972 GI bill amendments- Public Law 92-540-which significantly increased benefits payable to Vietnam veterans. This was followed by the Vietnam Era Veterans' Readjustment Assistance Act of 1974-Public Law 93-508-a comprehensive bill which was enacted over President Ford's veto in December of 1974. The measure which I introduce today is intended to complete further the efforts of 1972 and 1974 and to provide more adequate educational and employment assistance for our Nation's veterans. I am pleased that joining me in sponsorship of this comprehensive amendment is the ranking Republican member of the Subcommittee on Readjustment, Edu- cation and Employment, the distinguished senior Senator from Vermont (Mr. Stafford). Senator Stafford has been a hard working member of this sub- committee and played an important role in shaping the GI bill legislation enacted both in~ 1972 and 1974. I am pleased that continuing the strong bi- partisan tradition of this committee, he has joined once again to help fashion what I believe will be a strengthened and improved GI bill. At the onset, let me say that the Veterans' Education and Employment Assist- ance Act of 1976 is neither a completely finished product nor all that I would like it to be. It is, however, the product of a considerable amount of attention to the education and employment problems of veterans within the context of the budgetary restraint placed on our committee by the concurrent resolution on the budget adopted by the House and Senate earlier this year. The level of spending adopted for veterans' benefits and services in the concurrent resolution on the budget does not permit us to provide a cost-of-living increase to account fully for the changes in the Consumer Price Index since September of 1974, the effective date of the last GI bill increases. However, it does appear that we can grant an 8-percent increase within the context of available resources. Though this increase is not all I would like it to be, it is not an insubstantial increase in benefits payable to veterans. Members will also note that there is no provision in the amendment offered today for a general extension of the 10-year delimiting date for post-Korean veterans, those veterans who served between 1955 and 1966. I have previously addressed this issue in some detail and I refer my colleagues to the remarks I made on the floor of the Senate on June 2 this year. At that time, I noted the strong opposition to an extension by the administration and by others indicated that it might be difficult to extend the delimiting period over a Presidential veto. Second, I noted that, in any event, there was insufficient funds provided in the first concurrent resolution on the budget to permit such an ex- tension. Such remains the case. Nevertheless, I want my colleagues to know that if it is the clear and unmistaken expression of the will of Congress to ex- ceed and increase the amount of moneys provided to veterans' benefits and services in the first concurrent resolution for that purpose, then the committee would be in a position to consider proposals to extend the delimiting date. I must observe, however, that this will require a reversal of the earlier position of the Senate which voted during consideration of the first concurrent resolution 53 to 21 to table the amendment offered by Senator Cranston and myself to add additional moneys for veterans' benefits and services. Mr. President, there are also a number of provisions in the measure intro- duced today which are aimed at preventing or reducing abuses under the GI bill program. If all of these provisions are aimed at preventing or reducing abuses under the GI bill program and if all of these provisions are enacted, we believe that the result will be a reduction in overpayments and, ultimately, cost savings to the Government. PAGENO="0275" 2895 Finally, the amendment introduced today attempts to achieve a reasonable balance between those who would prospectively terminate GI bill benefits and those who would allow the current program to continue. In an attempt to bal- ance legitimate concerns about budgetary expenditures with the many advan- tages our Nation receives from GI bill expenditures, the amendment offered today would adopt a new post-Vietnam-era veterans' educational and assistance pro- gram. This program would require contributions by servicemen. In turn, match- ing funds, at the rate of $2 for each $1 contributed, will be paid by the Veterans' Administration. The new program will result in reduced future expenditures of GI bill moneys while, at the same time, gleaning many of the benefits which I believe are necessary to assure a viable military force and to continue the im- portant educational investments by our Nation in the youth of our country. Mr. President, the following is a brief summary of the major provisions of the Veterans' Education and Employment Assistance Act of 1976. Title I of the Veterans' Education and Employment Assistance Act of 1976: First, increases by 8 percent the subsistence allowance paid disabled veterans pursuing a course of vocational rehabilitation under chapter 31 of title 38, United States Code; Second, eliminates the current termination date for use by seriously disabled veterans of chapter 31 benefits when it is determined that such veterans are still in need of vocational rehabilitation; and Third, permits chapter 31 trainees to be trained in Federal agency facilities on the same basis as trainees under the Rehabilitation Act of 1973, thus afford- ing disabled veterans increased opportunities for Federal employment. Title II of the Veterans' Education and Employment Assistance Act of 1976: First, increases by 8 percent the educational assistance allowance paid eli- gible veterans pursuing a program of education-includung farm cooperative, elementary and secondary education, and preparatory educational assistance- under chapter 34 of title 38, United States Code; Second, increases by 8 percent the individualized tutorial assistance allow- ance authorized for eligible veterans with deficiencies in subjects required as part of an approved program of education; Third, extends the tutorial assistance program in certain cases to veterans enrolled in institutional or technical courses not leading to a standard college degree; Fourth, removes the current restriction to undergraduate use of the 9 months of additional benefit entitlement granted in 1974 thus allowing a maximum of 45 months of eligibility for an approved program of education-including graduate work; Fifth, extends the 10-year delimiting period for use of VA benefits for such periods of time that a veteran is prevented from completing his or her program of education because of a physical or mental disability not the result of the veterans' misconduct; Sixth, allows maximum entitlement for benefits under chapter 34 for service of less than 18 months if the veteran received a medical discharge because of a service-connected disability; Seventh, terminates authority for new enrollments in flight training effective October 1, 1976; Eighth, clarifies, codifies and strengthens certain administrative provisions of the VA educational assistance program to prevent or reduce abuses. Ninth, extends to all programs of education the requirement that no more than 85 percent of the students enrolled in certain approved courses be in receipt of VA benefits or other Federal grants; and Tenth, amends the Veterans' student services program to permit completion of a work study agreement even if the veteran ceases to be a full time student. Title III of the Veterans' Education and Employment Assistance Act of 1976: First, increases by 8 percent the educational assistance allowance paid sur- vivors of veterans who died of service-connected causes, and dependents of seri- ously disabled veterans; Second, extends maximum entitlement to benefits from 36 to 45 months for all persons training under chapter 35; Third, liberalizes the period of eligibility for use by eligible children of educa- tional assistance benefits under chapter 35; and Fourth, clarifies, codifies and strengthens certain administrative provisions of the VA educational assistance program to prevent or reduce abuses. Title IV of the Veterans' Education and Employment Assistance Act of 1976: PAGENO="0276" 2896 First, establishes December 31, 1976, as the terminating date for establishing eligibility for veterans education and training benefits under chapter 34 of title 38, United States Code; Second, establishes for those men and women entering the Armed Forces on or after January 1, 1977, a new chapter 32 educational program known as Post Vietnam Era Veterans Readjustment Assistance; and Third, provides that in the event universal military training is reimposed by law that those .entering military service after the effective date of such a change in the law shall be eligible for chapter 34 educational benefits. Title V of the Veterans' Education and Employment Assistance Act of 1976: First, increases by 8 percent the monthly training assistance allowance paid to eligible veterans or persons pursuing a full program of apprenticeship or other on-job training and provides similar increases for those pursuing a program of education by correspondence; Second, increases from $600 to $1,200 the maximum annual VA educational loan available for eligible veterans, survivors and dependents; Third, amends the VA educational loan program to provide that interest charges on such loans shall be comparable to, but shall not exceed those charged students under other federally insured educational loan programs; Fourth, clarifies, codifies and strengthens certain administrative provisions of the VA educational assistance program to prevent or reduce abuses. Fifth, I)ermlts continued VA payments for intervals between school terms and provides that when a veteran or eligible person transfers from one institution to another, payments ame permitted providing that in either event such periods do not exceed 30 days; Sixth, increases by 8 percent the allowance paid for administrative expenses incurred by State approving agencies in supervising approved educational insti- tutions and further permits in certain cases subcontracting by State agencies; Seventh, increases by $2 the reporting fee paid to institutions for each veteran or other eligible person enrolled therein; Eighth, strengthens and improves the Education Advisory Committee to the Veterans' Administration; and Ninth, repeals the current 48-month limitation for benefit entitlement to any person eligible and training under more than one VA educational assistance program. Title VI of the Veterans' Education and Employment Assistance Act of 1976: First, provides that the Veteran Employment Service within the Department of Labor shall be headed by an Assistant Secretary of Labor for Veteran Employ- ment; and Second, expands and strengthens the administrative controls to assure that eligible veterans receive satisfactory employment assistance. Title VII of the Veterans' Education and Employment Assistance Act of 1976: First, provides that except as otherwise specified all provisions shall become effective on October 1, 1976. Second, clarifies and strengthens provisions prohibiting the assignment of VA benefits. In addition to the foregoing, there are a number of technical amendments to chapter 31, 34, 35, and 3~ of title 38, United States Code, including the removal of unnecessary and unwarranted gender references. Most of the provisions would become effective on October 1, 1976 as contemplated by the congressional budget process. Mr. President. during the recess we will seek to receive all appropriate agency comments concerning the amendments proposed in the "Veterans' Education and Employment Assistance Act of 1976". In addition, during this recess period the committee would welcome receiving written comments, with respect to the sub- jects covered by this amendment, by any interested party. Such comments will be distributed to all committee members as well as made part of the committee's official education hearing record during the 94th Congress. It is my intention that the Subcommittee on Read~ ustment, Education, and Employment meet in open executive session shortly after the upcoming July recess so that the subcommittee may consider the measure proposed today together with any additional amend- ments which may be offered by the members. It is my hope that we will be in a position to report a bill to the full Senate for its consideration prior to the August recess. Mr. President, I ask unanimous consent that the text of the amendment be printed in the RECORD. There being no objection the amendment was ordered to be printed in the Record, as follows: PAGENO="0277" 2897 94TH CONGRESS 2D SEssIoN S 969 IN THE SENATE OF THE UNITED STATES JULY 1 (legislative day, JIJNE 18), 1976 Referred to the Committee on Veterans' Affairs and ordered to be printed AMENDMENT Intended to be proposed by Mr. I{ARTKE (for himself and Mr. STAFFORD) to S. 9~39, a bill to amend chapter 34 of title 38, United States Code, to extend the basic educational assist- ance eligibility for veterans under chapter 34 and for certain dependents under chapter 35 from thirty-six tO forty-fi~re months, viz: On page 1, line 3, strike out all after the enact- ing clause and insert in lieu thereof the following: 1 That this Act may be cited as the "Veterans Education and 2 Employment Assistance Act of 1976"~ Amdt. No. 2005 PAGENO="0278" 2898 2 1 TITLE I-CHAPTER 31 DISABLED VETERANS 2 VOCATIONAL REHABILITATION RATE AND 3 PROGRAM ADJUSTMENTS 4 SEc. 101. The table contained in section 1504 (b) of 5 title 38, United States Code, is amended to read as follows: "Column I Column II Column III Column IV Column V Type of training No de- pend- ents One de- pend- ent Two de- pend- ents More than two dependents The amount in column IV, plus the fol- lowing for each de- pendent in excess of two: Institutional: Full-time__ $226 $280 $329 $24 Three- quarter- time 170 210 247 18 Half-time~.~ 113 140 165 12 Farm coopera- tive, appren- tice, or other on-job train- ing: `l~'u11-time__ 197 238 275 18". 6 SEC. 102. Section 1503 (c) of title 38, United States 7 Code, is amended by striking out ", but not beyond ten years 8 after such termination date, or June 30, 1975, whichever 9 date is the later," and inserting in lieu thereof "when this 10 is determined by the Administrator to be necessary for such 11 veteran based upon the veteran's disability and need for voca- 12 tional rehabilitation,". PAGENO="0279" 2899 3 1 SEC. 103. Section 1511 of title 38, United States Code, 2 is amended by adding at the end thereof the following: "Not- 3 withstanding any other provision of law, the facilities of 4 any agency of the United States, as designated in clause (3) ~ of this section, may be used to provide unpaid training or 6 work experience as part or all of a veteran's program of 7 vocational rehabilitation when the Administrator determines ~ this to be necessary to accomplish vocational rehabifitation. ~ While pursuing such training, an uncompensated veteran 10 shall be deemed an employee of the United States for the ii purposes of the benefits of chapter 81 of title 5 but not for 12 the purposes of laws administered by the Civil Service 13 Commission.". 14 SEC. 104. Chapter 31 of title 38, United States Code, 15 is amended- 16 (1) by striking out in section 1502 (b) "him" and 17 inserting in lieu thereof "the veteran"; 18 (2) by striking out in subsections (a) and (b) of 19 section 1503 "his", "he", and "him" each time they 20 appear and inserting in lieu thereof "the veteran's", "the 21 veteran", and "the veteran", respectively; 22 (3) by striking out in section 1503 (c) "him" and 23 "he" each time they appear and inserting in lieu thereof 24 "the veteran" and by striking out "his" the first and PAGENO="0280" 2900 4 second time it appears and inserting in lieu thereof "the 2 veteran's" and "the veteran", respectively; 3 (4) by striking out in subsections (a) and (c) of 4 section 1504 "his" and "him" each time they appear 5 and inserting in lieu thereof "the veteran's" and "the .6 employer", respectively; 7 (5) by striking out in section 1505 "he" and "his" 8 each time they appear and inserting in lieu thereof "the 9 Administrator" and "the veteran's", respectively; 10 (6) by striking out in section 1507 "him" and 11 inserting in lieu thereof "the Administrator"; 12 (7) by striking out in section 1508 "he" and insert- 13 ing in lieu thereof "the Administrator"; 14 (8) by striking out in section 1509 (a) "him", 15 "his", and "he" each time they appear and inserting in 16 lieu thereof "the veteran", "the veteran's", and "the 17 veteran", respectively; 18 (9) byl striking out in section 1509 (b) "he" and 19 inserting in lieu thereof "the Administrator"; (10) by striking out irisection 1510 "he" each time it appears and inserting in lieu thereof such person 22 and PAGENO="0281" 2901 5 1 (11) by striking out in section 1511 "he" and in- 2 serting in lieu thereof "the Administrator". 3 TITLE IT-VETERANS EDUCATION RATE AND 4 PROGRAM ADJUSTMENTS 5 SEC. 201. Chapter 34 of title 38, United States Code, 6 is amended- 7 (1) by amending the table contained in paragraph 8 (1) of section 1682 (a) to read as follows: "Column I Column II Column III Column IV Column V Type of program No do- pond- ents One de- pend- ent Two do- pond- ents More than two dependents Institutional: Full-time~ Three- quarter- time Half-time__ Cooperative $292 219 146 235 $347 260 174 276 $396 297 198 313 The amount in column IV, plus the fol- lowing for each de- pendent in excess of two: $24 18 12 18"; PAGENO="0282" 2902 6 (2) by striking out in sectioii 1682 (b) "$270" and 2 inserting in lieu thereof "$292"; 3 (3) by amending the table contained in paragraph 4 (2) of section 1682 (c) to read as follows: "Column I Column - Column Column Co1umn~ II III IV No do- One de- Two do- More than two Basis pend- pond- pend- dependents ents ent ents The amount in column LV, plus the fol- lowing for each de- pendent in excess of two: Full-time $235 $276 $313 $18 Three_quarter- time 176 207 235 14 Half-time 118 138 157 9"; 5 and 6 (4) by striking out in section 1696 (b) "~270" and 7 inserting in lieu thereof "$292". 8 SEO. 202. Section 1652 of title 38, United States Code, ~ is amended by adding at the end thereof the following new 10 subsections: ii "(1) For the purposes of this chapter and chapter 36 12 of this title~ the term `institution of higher learning' means PAGENO="0283" 2903 7 1 a college, university, or similar institution offering postsec- 2 ondary level academic instruction that leads to an associate 3 oi~ higher degree or a technical or business school empowered 4 by the appropriate State education authority under State 5 law to grant an associate or higher degree. Such term shall 6 also include a hospital offering educational programs at 7 the postsecondary level without regard to whether the hos- 8 pital grants a postsecondary degree. 9 "(g) For the purposes of this chapter and chapter 36 10 of this title, the term `standard college degree' means an 11 associate or higher degree awarded by (1) an institution of 12 higher learning that is accredited as a collegiate institution 13 by a recognized accrediting agency; or (2) an institution 14 of higher learning that is a `candidate' for accreditation; 15 or (3) an institution of higher learning upon completion 16 of a course which is accredited by an agency recognized to 17 accredit specialized degree-level programs. The accrediting 18 agency must be one recognized by the Commissioner of Edu- 19 cation under the provisions of section 1775 of this title.". 20 SEO. 203. Section 1661 of title 38, United States Code, 21 is amended- 22 (1) by striking out in the second sentence of sub- 23 section (a) all after "period of" the second time it ap- 24 pears and inserting in lieu thereof "45 months (or the PAGENO="0284" 2904 8 equivalent thereof in part-time educational assistance) ."; 2 (2) by inserting in subsection (a) "or served for 3 a period of less than 18 months after such date and 4' received medical discharge because of service-connected 5 disabilities," after "active duty obligation,"; and 6 (3) by amending subsection (c) to read as follows: 7 " (c) Except as provided in subsection (b) and in sub- 8 chapters V and VI of this chapter, no eligible veteran shall 9 receive educational assistance under this chapter in excess 10 of 45 months.". Siro. 204. Section 1662 (a) of title 38, United States 12 Code, is amended by inserting immediately before the period 13 at the end thereof the following: "; except that in the case 14 `of any eligible veteran who was prevented from initiating or 15 completing such veteran's program of education within such 16 time period because of a physical or mental disability which `17 was not the result of such veteran's own misconduct, such `18 veteran shall, upon application, be granted an extension of 19 delimiting period for such length of time as the Administra- 20 tor `determines, from the evidence, that such veteran was 21 prevented from initiating or completing a program of `22 education.". 23 SEc. 205. (a) Chapter 34 of title 38, United States 24 Code, is amended- 25 (1) by striking out in section 1662 (c) "or flight PAGENO="0285" 2905 9 1 training within the provisions of section 1677 of this 2 chapter."; (2) by striking out in section 1673 (b) "Except as 4 provided in section 1677 of this title, the" and inserting 5 in lieu thereof "The"; 6 (3) by striking out section 1677 in its entirety; 7 (4) by striking out in section 1681 (b) "or a pro- 8 gram of flight training,"; 9 (5) by striking out section 1681 (c) 10 (6) by striking out the center heading which imme- diately precedes section 1681 (c) ; and 12 (7) by striking out in section 1682 (a) (1) "1677 13 or". 14 (b) The table of sections at the beginning of chapter 34 15 of title 38, United States Code, is amended by striking out: "1677. Flight training.". 16 (c) Chapter 36 of title 38, United States Code, is 17 amended- 18 (1) by striking out in section 1780 (a) "or a prb- 19 gram of flight training,"; and 20 (2) by striking out in section 1798 (c) "flight,". 21 (d) Notwithstanding the provisions of this section, any 22 eligible veteran pursuing a program of flight training under 23 the authority of section 1677 of chapter 34 of title 3&, Amdt. No. 2005-2 PAGENO="0286" 2906 10 1 United States Code, on the day before the effective date ~ 2 this Act, shall be permitted to continue to pursue such 3 program through completion of the authorized objective if 4 continuously enrolled. 5 Si~o. 206. Section 1673 of title 38, United States Code, 6 is amended- (1) by striking out at the end of subsection (a) (2) 8 "or"; 9 (2) by striking out the period at the end of subsec- 10 tion (a) (3) and inserting in lieu thereof "; or"; ii (3) by adding at the end of subsection (a) a new 12 clause (4) as follows: 13 "(4) any independent study program except one 14 leading to a standard college degree."; and 15 (4) by amending subsectidn (d) to read as follows: 16 " (d) The Administrator shall not approve the enrollment 17 of any eligible veteran, not already enrolled, in any course 18 (other than one offered pursuant to subchapter V or subchap- 19 ter VI of this chapter or any farm cooperative training 20 course) for any period during which the Administrator 21 fInds that more than 85 per centum of the students enrolled in 22 the course are having all of. their tuition, fees, or other 23 charges paid to o~r for them by the educational institution or 24 by grants from any Federal agency.". PAGENO="0287" 2907 11 1 SEC. 207. Section 1674 of title 38, United States Code, 2 is amended by inserting immediately after the first sentence ~ thereof the following: "Progress will be considered unsatis- ~ factory at any time the eligible veteran is not progressing at a rate that will permit such veteran to graduate within the 6 approved length of the course based on the training time as 7 certified to the Veterans' Administration unless the Admin- 8 istrator finds there are mitigating circumstances.". 9 SEC. 208. Section 1682 of title 38, United States Code, 10 ~S amended by adding a new subsection (e) at the end there- j~ ofas follows: 12 " (e) The educational assistance allowance of an eligible 13 veteran pursuing an independent study program which leads i4 to a standard college degree shall be computed at the rate .15 provided in subsection (b) (2) of this section. In those cases 16 where independent study is combined with resident training 17 and the resident training constitutes the major portion of 18 such training, the maximum allowance may not exceed the 19 full-time institutional allowance provided under subsection 20 (a) (1) of this section.". 21 SEC. 209. Section 1685 (b) of title 38, United States 22 Code, is amended by adding at the end thereof the following: 23 "In the event the veteran ceases to be a full-time student 24 before completing such agreement, the veteran may, with the PAGENO="0288" 2908 12 i approval of the Administrator, be permitted to complete such 2 agreement.". 3 SEc. 210. Section 1692 of title 38, United States Code, 4 is amendecir- 5 (1) by adding at the end of subsection (a) thereof 6 the following: "A veteran enrolled in and pursuing an 7 institutional or technical course not leading to a standard 8 college degree, who has not received a high school 9 diploma or equivalency certificate, may, subject to such io regulations as the Administrator shall prescribe, be en- ii titled to receive tutorial assistance. Such assistance shall 12 be limited to the academic portions of such a course and 13 may not be granted in connection with the laboratory or 14 shop portions or to any courses provided under section 15 1691 or section 1695 of this title."; and 16 (2) by striking out in subsection (b) "$60" and 17 "$720" and inserting in lieu thereof "$65" and "$780", 18 respectively. 19 SEC. 211. (a) Chapter 34 of title 38, United States 20 Code, is amended- 21 (1) by striking out in section 1652 (e) "United 22 States Code,"; 23 (2) by striking out in subsections (a) and (b) of 24 section 1681 "section 1780" and inserting in lieu thereof 25 "chapter 36"; PAGENO="0289" 2909 13 1 (3) by redesignating section 1 697A as section 2 1698; and 3 (4) by striking out in the table of sections at the 4 beginning of such chapter "1697A" and inserting in lieu 5 thereof "1698.". 6 SEC. 212. Chapter 34 of title 38, United States Code, is 7 amended- 8 (1) by striking out in subsections (a) and (d) of 9 section 1652 "he" and "wife" each time they appear 10 and inserting in lieu thereof "such individual" and 11 "spouse", respectively; 12 (2) by striking out in section 1661 (a) "his" and 13 "he" each time they appear and inserting in lieu thereof 14 "the veteran's" and "the veteran", respectively; (3) by striking out in subsections (a), (b), and 16 (d) of section 1662 "his" ai~d "he" each time they 17 appear and inserting in lieu thereof "the veteran's" arid 18 "the veteran", respectively; 19 (4) by striking out in section 1663 "he" each time 20 it appears and inserting in lieu thereof "the Admin- 21 istrator"; 22 (5) by striking, out in section 1670 "him" each 23 time it appears and inserting in lieu thereof "the vet- 24 eran"; 78-226 0 -77 - 19 (Pt.4) PAGENO="0290" 2910 14. 1 (6) by striking out in section 1671 "he" the first 2 time it appeal's aiid inserting in lieu thereof "the Ad~ 3 ministrator", by striking out "he" the second time it 4 appears and inserting in lieu thereof "the veteran or 5 person", and by striking out "his" each time it appears 6 and inserting in lieu thereof "the veteran's or person's"; 7 (7) by striking out in section 1673 (a) "lie" and 8 "his" each time they appear and inserting in lieu thereof 9 "the Administrator" and `the veteran's", respectively; 10 (8) by striking out in section 1674 "his" and "lie" 11 each time they appear and inserting in lieu thereof 12 "the veteraii's" and "the Administrator", respectively; 13 (9) by strildng out in section 1676 "his" and "he" 14 each time they appear and inserting in lieu thereof "the 15 Administrator's" and "the Administrator", respectively; (10) by striking out in seetion 1681 (a) "his" and i7~. inserting in lieu thereof "the veteran's"; 18 (11) by striking out in~section 1685 (e) "he" and 19 "his" each time they appeal' and inserting in lieu thereOf 20 : "the Administrator" and "the veteran's", respectively; 21 (12) by striking out in section 1691 (a). "his" and 22 "he" each time they appear and inserting in lieu thereof 23 "th&i~ëterari's" and "the veteran", respectively; 24 (13) by striking out in section 1696 (a) "he" and 25 inserting in lieu thereof "the Administrator"; and PAGENO="0291" 2911 15 1 (14) by striking out in subsections (a) and (b) of 2 section 1698 (as redesignated by section 211 (a) (3) of this Act) "lie" and "his" each time they appear and 4 inserting in lieu thereof "the Administrator" and "such 5 person's", respectively. 6 TITLE 111-CHAPTER 35 SURVIVORS' AND DE- 7 PENDENTS' EDUCATIONAL ASSISTANCE 8 RATE AND PROGRAM ADJUSTMENTS 9 SEC. 301. Chapter 35 of title 38, United States Code. 10 is amended- ii (1) by striking out in section 1732 (b) "$217" a~d 12 inserting in lieu thereof "$235"; and 13 (2) by amending subsection (a) of section 1742 14 to read as follows: 15 "(a) While the eligible person is enrolled in and pur- 16 suing a full-time ~`ourse of special restorative training, the 17 parent or guardian shall be entitled to receive on behalf 18 of such person a special tr~tining allowance computed at the 19 basic rate of $292 per month. If the charges for t~uition and 20 fees applicable to any such course are more than $92 per 21 calendar month, the basic monthly allowance may be iii- 22 creased by the amount that such charges exceed$92 a month, 23 upon election by the parent or guardian of the eligible person 24 to have such person's period of entitlement reduced by one PAGENO="0292" 2912 16 1 day for each $9.76 that the special training allowance paid 2 exceeds the basic monthly allowance.". 3 SEc. 302. Section 1701 (a) of title 38, United States 4 Code, is amended by adding at the end thereof the following 5 new paragraphs: 6 "(10) For the purposes of this chapter and chapter 36 7 of this title, the term `institution of higher learning' means a 8 college, university, o~r similar institution offering postsecond- 9 ary level academic instruction that leads to an associate or 10 higher degree or a technical or business school empowered 11 by the appropriate State education authority under State 12 law to grant an associate or higher degree. Such term shall 13 also include a hospital offering educational programs at the 14 postsecondary level without regard to whether the hospital 15 grants a postsecondary degree. 16 "(11) For the purposes of this chapter and chapter 36 17 of this title, the term `standard college degree' means an asso- 18 ciate or higher degree awarded by (A) an institution of 19 higher learning that is accredited as a collegiate institution 20 by a recognized accrediting agency; or (B) an institution of 21' higher learning that is a `candidate' for accreditation; or 22 (C) an institution of higher learning upon completion of a 23 course which is accredited by an agency recognized to ac- 24 credit specialized degree-level programs. The accrediting PAGENO="0293" 2913 17 1 agency must be one recognized by the C~mmis~ioner of Edii- 2 cation under the provishns of section 1775 of this title.". 3 SEC. 303. Section 1711 of title 38, United States Code, 4 is amended- 5 (1) by striking out in subsection (a') "thirty-six" 6 and inserting in lien thereof "45"; and (2) by striking out in ~sui)section (b) *"nine" and 8 inserting in lieu thereof "12". 9 SEC. 304. Section 1712 of title 38, United States Code, 10 i~ amended- 11 (1) by striking out in clauses (3) and (4) of sub'-. 12 section (a) "five" each time it appears'and inserting hi: 13 lieu thereof "8"; 14 (2) by amending clause (5) of subsection (a) to 15 read as follows: 16 " (5) (A) if such person is enrolled in a.n edue~t- 17 tional institution regularly operated on the quarter or 18 semester system and such periOd ends during a quarter 19 or semester, such period shall be extended to the end 20 of the quarter or semester; or " 21 "(B) if such person is enrolled in an educational in- 22 stitution operated on othOr `thali a quarter or semest~r 23 system and such period ends after `a thajoi~'portion of the 24 course is completed, sOch period shall be ~xféndcd to PAGENO="0294" 2914 18 the end of the course, or until 12 weeks have expired, 2 whichever first occurs."; and 3 (3) by repealing subsection (d) and redesignating 4 subsections (e) , (1) , and (g) , as subsections (d) , (e) 5 and (f), respectively. 6 SEC. 305. Section 1713 of title 38, United States Code, 7 is amended to read as follows: S "The parent or guardian of a person (or the eligible 9 person if such person has attained legal majority) for 10 whom educational assistance is sought under this chapter 11 shall submit an application to the Administrator which shall 12 be in such form and contain such information as the Adminis- 13 trator shall prescribe. If the Administrator finds that the 14 ierson on whose behalf the application is sul)mitted is an 15 eligible person, the Administrator shall approve the applica- 16 tion provisionally. The Administrator shall notify the parent 17; or guardian or eligible persom~ (if the person has attained 18 legal majority) of the provisional approval, or of the dis- 19 approval of the application.". 20 SEc. 306. Section 1723 (a) of title 38, United States 21 Code, is amended- 22 (1) by striking out at the end of clause (2) "or"; 23 (2) by striking out at the end of clause (3) the 24 period and inserting in lien thereof "; or"; and PAGENO="0295" 2915 19 (3) by adding at the end thereof a new clause (4) 2 as follows: 3 "(4) any independent study program except one 4 leading to a standard college degree.". 5 Si~c. 307. Section 1724 of title 38, United States Code, 6 is amended by inserting immediately after the first sentence 7 thereof the following: "Progress will be considered unsatis- 8 factory at any time an eligible person is not progressing at a 9 rate that will permit such person to graduate within the 10 approved length of the course based on the training time as 11 certified to the Veterans' Administration IlIlless the Admin- 12 istrator finds there are mi tigatiiig circumstances.". 13 SEc. 308. Section 1732 (c) of title 38, United States 14 Code, is amended by adding a new paragraph (3) at the 15 end thereof as follows: 16 " (3) The monthly educational assistance allowance to 1.7 be paid on behalf of an eligible pei~~n pursuing an mdc- 18 pcndent study program which leads to a. standard college 19 degree shall be computed at the rate prescribed in section 20 1682 (c) of this title.". 21 SEc. 309. (a) The title of chapter 35 of title 38, United 22 States Code, is amended by striking out PAGENO="0296" 2916 20 "CHAPTER 35-WAR ORPHANS' AND WIDOWS' 2 EDUCATIONA~L ASSISTANCE" * 3 and inserting in lieu thereof 4 "CHAPTER 35-SURVIVORS' AND DEPENDENTS' 5 EDUCATIONAL ASSISTANCE". * 6 (b) The table of chapters at the beginning of title 38, 7 United States Code, and the table of chapters at the begin- 8 ning of part III of such title are each amended by striking 9' out "35. War Orphans' and Widows' Educational Assistance 1700" 1.0 and inserting in lieu thereof "35. Survivors' and Dependents' Educational Assistance 1700". ii (c) Section 1731 (a) is amended by striking out "see- 12 tion 1780" and inserting in lieu thereof "chapter 36". 13 SEc. 310. Chapter 35 of title 38, United States Code, 14 is amended- 15 (1) by striking out in section 1700 "widows", 16 "wives", and "his" each time they appear and inserting 17 in lieu thereof "surviving spouses", "spouses", and "the 18 veteran's", respectively; 19 (2) by striking out in section 1701 (a) "widow" 20 and "wife" each time they appear and inserting in lieu 21 thereof "surviving spouse" and "spouse", respectively; 22 (3) by striking out in section 1701 (b) "his" and PAGENO="0297" 2917 21 1 inserting in lieu thereof "the person's" and by' striking 2 out "himself"; 3 (4) by striking out in sectio~ii 1701 (c) "his" each 4 time it appears and inserting in lieu thereof "such per- 5 son's" and by striking out "himself"; 6 (5) by striking out in section 1701 (d) "lie" each 7 time it appears and inserting, in lieu thereof "such 8 person"; 9 (6) by striking out in section 1711. (b) "she" the 10 first time it appears and inserting in. lieu' thereof "the 11 5p0115e", by striking out "her" each time it appears arid 12 inserting in lieu thereof "such perso.n's", and by striking 13 . dut "lie or she" ea.ch time it appears and inserting in 14 lieu thereof "such person"; . 15 (7) by striking out in:section 1712 (a) "hurn", "his7'~. 16 and "lie" each time they appear arid in~ei~ting in lien 17 thereof "the person", "the person's", and "the person"; iS respectively; 19 (8) by st.riking out in section 1712(c) "him", 20 "he", "his" each time they appear and inserting in lieu 21 thereof "such person", "such person",. and `*`~uch per- 22 son's", respectively; . .~ 23 (9) by striking out in subsections (e) and (f) ~f 24 section 1712 (as redesignated by section 304 (3) of this PAGENO="0298" 2918 `22 1 Act) "her" and "lie" each time they appear and inserting 2 in lieu thereof "the" and "such persoil", respectively; 3 (10) by striking out in section 1720 (a) "his" each 4 tune it appears and inserting in hen thereof "such per'- 5 son's"; 6 (11) by striking out in section 1721 "lie" and in- 7 serting in lieu thereof "the Administrator"; 8 (12) by striking out in section 1723 (a) "he" and 9 "his" each time they appear and inserting in lieu there- 10 of "the Administrator" and "the person's", respectively; 11 (13) by striking out in sectioii 1723 (c) "his" and 12 "lie" each time they appear and inserting in lieu thereof 13 "the Administrator's" and "the Administrator", respec- 14 tively; 15 (14) by striking out in sectioii 1723 (d) "his" each 16 time it appears and inserting in lieu thereof "such per- 17 son's"; 18 (15) by striking out in section 1724 "he" the first 19 time it appears and insertiiig in lieu thereof "such per- 20 son", by striking out "his" each time it appears and 21 inserting in lieu thereof "the person's", and by striking 22 out "he" the second time it appears and inserting in lieu 23 thereof "the Administrator"; 24 (16) by striking out in section 1731 (b) "his" and PAGENO="0299" 2919 23 1 "he" each time they appear and inserting in lieu thereof 2 "the person's" and "the person", respectively; 3 (17) by striking out in section 1733 (a) "wife or 4 widow" and "she" and inserting in lieu thereof "spouse 5 or surviving spouse" and "such spouse", respectively; 6 (18) by striking out in section 1733 (b) "he" and 7 inserting in lieu thereof "such person"; 8 (19) by striking out in section 1734 (b) "wife or 9 widow" and inserting in lieu thereof "spouse or surviv- 10 ing spouse"; 11 (20) by striking out in section 1736 "he" and in- 12 serting in lieu thereof "the Administrator"; 13 (21) by striking out in section 1741 (b) "lie" and 14 inserting in lieu thereof "the Administrator"; 15 (22) by striking out in subsections (a) and (b) of 16 section 1743 "his" and "he" each time they appear and 17 inserting in lieu thereof "the Administrator's" and "the 18 Administrator", respectively; 19 (23) by striking out in section 1761 (a) "he" and 20 inserting in lieu thereof "the Administrator"; and 21 - (24) by striking out in ~ection:1763 "his" and in- 22 serting in lieu thereof "suchperson's". - - PAGENO="0300" 2920 24 1 TITLE TV-POST-VIETNAM ERA VETERANS' 2 READJUSTMENT ASSISTANCE ACT 3 SEc. 401. This title may be cited as the "Post-Vietnam 4 Era Veterans' Readjustment Assistance Act of 1977". 5 SEc. 402. Section 1652 of title 38, United States Code, 6 is amended- 7 (1) by amending paragraph (1) of subsection (a) 8 to read as follows: "(1) The term `eligible . veteran' means any veteran 10 who- .11 "(A) served on active duty for a period of more 12 than 180 days, anypart of which occurred after Janu- 13 ary 31, 1955, and before January 1, 1977; or 14 "(B) contracted with the Armed Forces and was 15 enlisted in or assigned to a reserve component prior to 16 January 1, 1977, and as a result of such enlistment of 17 assignn'ient sei~ved on active duty for a period of more 18 than 180 days, any part of which commenced within 12 19 months after JanuaryL 1, 1977, and was discharged or 20 released from such active duty under conditions other 21 than dishonora1~1e; or .. 22 "(C) ~vas discharged or .releas~d from active duty, 23 any part of which was performed after January 31, 24 1955, and before January 1, 1977, or following en- 25 trance into active service from an enlistment provided PAGENO="0301" 2921 25 1 for under clause (B) of this paragraph, because of a 2 service-connected disability."; and 3 (2) by inserting in subsection (a) (2) "or (B)" 4 after "paragraph (1) (A) ". 5 SEa. 403. Section 14361 (a) of title 38, United States ~ Oode, is amended- 7 (1) by striking oat the period at the end of the s first sentence and inserting in lieu thereof a comma and "and before January 1, 1977."; 10 (2) by inserting in the second sentence "and before 11 January 1, 1977," after "January 31, 1955,"; and 12 (3) by adding at the end thereof a new sentence as 13 follows: "In the case of any person serving on active 14 duty on December 31, 1976, or a person whose eligi- 15 bility is based on section 1652 (a) (1) (B) of this chap- 16 ter, the ending date for computing such person's 17 entitlement shall be the date of such person's first dis- 18 charge or release from active duty after December 31, 19 1976.". 20 SEc. 404. Part III of title, 38, United States Code, is 21 amended by inserting immediately after chapter 31 of such 22 title a new chapter as follows: PAGENO="0302" 2922 2(3 1 "CHAPTER 32-POST-VIETNAM ERA VETERANS' 2 READJUSTMENT ASSISTANCE "SUBCHAPTER I-PURPOSES; DEFINITIONS "See. "1601. Purpose. "1602. Definitions. "SUBChAPTER Il-ELIGIBILITY MATCHING FUND "1621. Eligibility. "1622. Contributions; matching fund. "1623. Refunds ofcontributions upon disenroilment. "1624. Death of participant. "1625. Release or discharge under conditions which would bar use of * benefits. ~~SUBCHAPTER Ill-ENTITLEMENT; DURATION "1631. Entitlement; loan eligibility. "1632. Duration; limitations. - - ~`SUBCHAPTEE IV-ADMINISTRATION "1641. Requirements. "1642. Outreach efforts. "1643. Outreach reporting requirements. "1644. Deposits; reports. 3 "Subchapter I-Purpose; Definitions 4 "~ 1601. Purpose 5 "It is the purpose of this chapter (1) to provide educa- 6 tional assistance to those men and women who enter the 7 Armed Forces after December 31, 1976, (2) to assist young 8 men and women in obtaining an education they might not 9 otherwise be able to afford, and (3) to promote and assist 10 the all volunteer military program of the United State.s by 11 attracting qualified men and women to serve in the Armed 12 Forces. PAGENO="0303" 2923 27 1 "~ 1602. Definitions 2 "For the purposes of this chapter- "(1) (A) The term `eligible veteran' means any vet- 4 eran who (i) entered military service on or after January ~ 1, 1977, served on active duty for a period of more than 6 180 days after such date, and was discharged or released 7 therefrom under conditions other than dishonorable, or (ii) 8 entered military service on or after January 1, 1977, and 9 was discharged or released from active duty after such date io for a service-connected disability. "(B) For the purposes of paragraph (1) (A), the 12 term `active duty' does not include any period during which 13 an individual (i) was assigned full time by the Armed 14 Forces to a civilian institution for a course of education 15 which was substantially the same as established courses 16 offered to civilians, (ii) served as a cadet or midshipman 17 at `one of the `service academies, or (iii) served under the 18 provisions of section 511 (d) of title 10 pursuant to an en- 19 listment in the Army National Guard or the Air National 20 Guard or as reserve for service in the Army Reserve, 21 Naval Reserve, Air Force Reserve, Marine Corps Reserve, 22 or Coast Guard Reserve, PAGENO="0304" 2924 28 1 "(2) The terms `program df education' and `educational 2 institution' shall have the same meaning ascribed to them in 3 sections 1652 (b) and 1652 (c), respectively, of this title. 4 "(3) The term `participant' is a person who is par- 5 ticipating in the educational benefits program established 6 under this chapter. 7 "Subchapter II-Eligibility; Matching Funds 8 "~ 1621. Eligibility 9 "(a) Each person entering military service on or after 10 January 1, 1977, shall have the right to enroll in the educa- 11 tional benefits program provided by this chapter (herein- 12 after in this chapter referred to as the `program' except 13 where the text indicates otherwise) at any time during such 14 person's service on active duty. When a person elects to enroll i5 in the program such person must participate for at least 12 16 consecutive months before disenrolling or suspending partici- 17 pation. 18 "(h) The requirement for 12 consecutive months of par- 19 ticipation required by subsection (a) of this section shall 20 not apply when (1) the participant suspends participation 21 or disenrolls from the program because of personal hard- 22 ship as defined in regulations issued jointly by the Admin- 23 istrator and the Secretary of Defense (hereinafter in this 24 chapter referred to as the `Secretary'), or (2) the participant 25 is discharged or released from active duty~ PAGENO="0305" 2925 29 1 "(c) A participant shall be permitted to suspend par- 2 ticipation or disenroll from the program at the end of any 3 12-consecutive-month period of participation. If participa- 4 tion is suspended, the participant shall be eligible to make 5 additional contributions to the program under such terms and 6 conditions as shall he prescribed by regulations issued jointly 7 by the Administrator and the Secretary. 8 "(d) If a participant disenrolls from the program, such ~ participant forfeits any entitlement to benefits under the pro- 10 gram except as provided in subsection (e) of this section. A ii participant who disenrolls from the program is eligible for 12 a refund of such participant's contributions as provided in 13 section 1623 of this title. 14 "(e) A participant who has disenrolled m~y be per- is mitted to reenroll in the program under such conditions as 16 shall be prescribed jointly by the Administrator and the 17 Secretary. 18 "~ 1622. Contributions; matching fund 19 "(a) Each person electing to participate in the program 20. shall agree to have a monthly deduction made from such 21 person's military pay. Such monthly deduction shall be in 22 any amount not less than $50 nor. more than $75 except that 23 the amount must be divisible by 5. Any such amount con- 24 tributed by the participant or contributed by the Secretary 25 pursuant ~o subsection (c) of this section shall be deposited 78-226 0 - 77 - 20 (Pt. 4) PAGENO="0306" 2926 30 1 in a special educational funding account (hereinafter in 2 this chapter referred to as the `fund') to lie established 3 in the Treasury of the United States. Contributions made by 4 the partIcipant shall be limited to a maximum of $2,700. 5 "(b) Except as otherwise provided in this chapter, each 6 monthly contribution made by a participant under subsection 7 (a) shall entitle the participailt to matching funds from the 8 Veterans' Administration at the rate of $2 for each $1 con- 9 tributed by the participant. 10 "(c) The Secretary is authorized to contribute to the 11 fund of any participant such contributions as the Secretary 12 deems necessary or appropriate to encourage persons to 13 enter the Armed Forces. The Secretary is authorized to issue 14 such rules and regulations as the Secretary deems necessary 15 or appropriate to implement the provisions of this sub- 16 section. 17 "~ 1623~ Refunds of contributions upon disenroilment 18 "(a) Contributions made to the program by a partici- 19 pant may be refunded only after the participant has dis- 20 enrolled from the program or as provided in section 1624. 21 "(b) If a participant disenrohls from the program prior 22 to release or discharge from active duty, such participant's 23 contributions will be refunded on the date of the partici- 24 pant's release or discharge from active duty or within 60 25 days of disenroilment, whichever is later, except that re- PAGENO="0307" 2927 `1 0. i funds may be made earlier in instances of hardship or other 2 good reason as prescribed in regulations issued jointly by the 3 Administrator and the Secretary. 4 "(c) If a participant disenrolls from the program after 5 release or discharge from active duty, the participant's con- 6 tributions shall be refunded within 60 days of disenroliment. 7 "~ 1624. Death of participant 8 " (a) If a participant dies while, still on active duty, 9 the amount of such participant's coiitributions to the fund 10 shall be paid (1) to the beneficiary or beneficiaries designated 11 by such participant under such participant's Servicemen's 12 Group Life Insurance policy, or (2) to the participant's 13 estate if no beneficiary has been designated under such policy 14 or if the participant is not insured tinder the Servicemen's 15 Group Life Insurance program. 16 "(b) If a participant dies after having been discharged 17 or released from active duty and before using any or all of 18 the contributions which the participant made to the fund, 19 such unused contributions shall be paid as prescribed in sub- 20 section (a) of this section. 21 "~ 1625. Release or discharge under conditions which 22 would bar the use of benefits 23 "If a participant in the program is discharged or re- 24 leased from active duty under conditions which would bar 25 the use of benefits provided by this chapter, such participant PAGENO="0308" 2928 32 1 is automatically disenrolled and any contributions made by 2 such participant shall be refunded to such participant on the ~ date of such participant's discharge or release from active 4 duty or within 60 days thereafter. 5 "Subchapter ill-Entitlement; Duration 6 "~ 1631. Entitlement; loan eligibility "(a) (1) A participant shall be entitled to a maximum ~ of 36 monthly benefit payments (or their equivalent in the ~ event of part-time benefit payments). 10 "(2) The amount of each monthly payment to which ~ any eligible veteran is entitled shall be ascertained by (A) 12 adding all contributions made to the fund by the eligible vet- 13 eran, (B) multiplying the quotient by 3, (0) adding all 14 contributions made to the fund by the Secretary, and (D) 15 dividing the sum by the lesser of 36 or the number of months 16 in which contributions were made by such veteran. 17 "(3) Payment of benefits under this chapter. may be is made only after an eligible veteran has been discharged or 19 released from active duty and only for such periods of time 20 during which the eligible veteran is actually enrolled in and 21 pursuing an approved program of education. Benefits pay- 22 able under this chapter may not be assigned. 23 "(b) Any member of the Armed Forces participating in 24 the program shall be eligible to participate in the Predis- PAGENO="0309" 2929 83 1 charge Education Program (PREP) authorized by sub- 2 chapter VI of chapter 34 of this title. "(c) In the case of a participant pursuing a program of 4 education under this chapter by correspondence, such par- ~ ticipant's entitlement shall be charged at the rate of 1 6 month's entitlement for each month of benefits paid to the 7 participant (computed on the basis of the formula provided s in subsection (a) (2) of this section). "(d) Eligible veterans participating in the program 10 shall be eligible for education loans authorized by subchapter ~i III of chapter 36 of this title in such amounts and on the 12 same terms and conditions as provided in such subchapter, 13 except that the term `eligible veteran' as used in such sub- 14 chapter shall be deemed to include `eligibleS veteran' as de- 15 fined in this chapter~ 16 "~ 1632. Duration; limitations 17 "No educational assistance may be afforded an eli- 18 gible veteran under this chapter beyond the date 10 years 19 after such veteran's last discharge or release from active duty. 20 In the event an eligible veteran has not utilized any or all of 21 such veteran's entitlement by the end of the 10-year period, 22 such eligible veteran is automatically disenrolled and any 23 contributions made by such veteran remaining in the fund 24 shall be refunded to the veteran following notice to the PAGENO="0310" 2930 34 1 veteran and an application by the veteran for such refund. 2 "Subchapter IV-Administration 3 "~ 1641. Requirements 4 "The provisions of the sections 1663, 1670, 1671, 1673, 5 1674, 1R7~3, 1683, 1685, 1695, 1696, 1697, and 1698 (as 6 redesignated by section 211 (a) (3) of this Act) of this title 7 and the provisions of chapter 36 of this title, with Ihe 8 exception of sections 1777, 1780 (c), and 1787, shall be 9 applicable to the program. 10 "~ 1642. Outreach efforts 11 "The Administrator shall designate an appropriate 12 official of the Veterans' Administration who shall cooperate 13 with and assist the Secretary (or any official designated by 14 such Secretary as administratively responsible for such 15 matters) in carrying out an effective outreach program to 16 acquaint all persons entering or considering entry into the 17 Armed Forces with the benefits and advantages of the pro- 18 gram provided for in this chapter. The outreach program 19 shall be designed to advise and counsel each person entering 20 and each person considering entry into the Armed Forces 21 on or after January 1, 1977, with respect to the benefits and 22 advantages of enrollment in the program. 23 "~ 1643. Outreach reporting requirements 24 "The Administrator and the Secretary shall, within 25 90 days after the date of enactment of this chapter, submit PAGENO="0311" 2931 35 1 to the Committees on Veteran's Affairs of the Senate and 2 house of Representatives a joint report containing their 3 respective plans for implementation of the program provided 4 for in this chapter. The Administrator and the Secretary 5 shall submit to such committees a report each year detailing 6 the operations of the program during the preceding year. 7 The first such annual report shall be submitted 15 months 8 after the date of enactment of this section. 9 "~ 1644. Deposits; reports 10 "Deductions made by the Department of Defense from ii the military pay of any participant shall be promptly de- 112 posited in the fund. The Secretary shall submit to the Ad- 13 ministrator a report each month showing the name and serial 14 number of each participant, the amount of the deduction 15 made from the military pay of such participant, the date the 16 cOntril)ution was made to the fund, and the name and serial 17 number of each participant who disenrolls or suspends par- 18 ticipation in the program. The Administrator shall maintain 19 accounts showing contributions made to the fund by mdi- 20 vidual participants as well as disbursements made from the 21 fund in the form of benefits.". 22 SEc. 405. The rtable of chapters at the beginning of 23 title 38, United States Code, and the table of chapters at 24 the beginning of part III of such title are each amended by 25 inserting immediately below "81. VOCATIONAL REHABILITATION 1501" PAGENO="0312" 2932 3(3 I the following: "32. PosT-VIETNA3I ERA VETERANS' READJUSTMENT ASSISTANCE_ 1601". *2 SEC. 406. The provisions of this title shall become. 3 effective on January 1, 1977. 4 SEC. 407. In the event that universal military training 5 is reimposed by law- 6 (a) any individual entering military service on or 7 after the effective date of such law shall be eligible to S accrue entitlement to the benefits provided by chapter 34 9 of title 38, United States Code, but shall not be eligible 10 under the provisions of chapter 32 of such title (provided 11 in section 404 of this Act) ; and 12 (b) any veteran eligible, under the provisions of 13 chapter 32 of such title (provided in section 404 of this 14 Act), shall have the right to elect to (1) remain under 15 the provisions of chapter34 of title 38. In the event the 16 eligible veteran elects to come under the provisions of 17 chapter 34, such veteran shall be deemed to have dis- 18 enrolled under chapter .32, and such veteran's contribu- 19 tion to the matching fund shall be refunded as provided in 20 such chapter. In the event the veteran elects to come 21 under the provisions of chapter 34,' such veteran's eligi- 22 bility for benefits under such chapter shall accrue from 23 the effective date that universal training is reimposed 24 by law. PAGENO="0313" 2933 37 1 TITLE V-CHAPTER 36 EDUCATION LOAN AND 2 PROGRAM ADMINISTRATION AMENDMENTS 3 SEC. 501. Chapter 36 of title 38, United States Code, is 4 amended- 5 6 7 8 (1) by striking out in section 1786 (a) (2) "$270" and inserting in lieu thereof "$292"; and (2) by amending the table contained in paragraph (1) of section 1787 (b) to read as follows: P~Colu~~Coln II III IV Periods of No de- One de- Two de- training pend- n Column V More than two dependents The amount in column IV, plus the fol- lowing for each de- pendent in excess of two: $11 11 11 9 10 11 112 13 First 6 months $212 $238 $260 Second6months_. 159 185 207 Third 6 months__ 106 132 154 Fourth and any succeeding 6- monthperiods~ 53 79 101 11"; SEC. 502. Subchapter III of chapter 36 of title 38, United States Code, is amended- (1) by striking out in section 1798 (b) (3) "$270" and "$600" and inserting in lieu thereof "$292" and "$1,200", respectively; and PAGENO="0314" 2934 38 1 (2) by amending clause (3) of section 1798 (d) to 2 read as follows: - 3 "(3) shall provide that the loan shall bear interest, 4 on the mipaid balance of the loan, at a rate prescribed 5 by the Administrator, at the. time the loan was contracted 6 for which rate shall be comparable to the rate of 7 interest charged students at such time on loans in- 8 sured by the Commissioner of Education, Department 9 of Health, Education, and Welfare, under part B of 10 title IV of the Higher Education Act of 1965, but 11 in no event shall the rate so prescribed by the Admin- 12 istrator exceed the rate charged students on such insured 13 loans, and shall provide, that no interest shall accrue 14 prior to the beginning date of repayment; and". 15 Sno. 503. Section 1774 of title 38, United States Code, 16 is amended- 17 (1) by adding at the end of subsection (a) thereof 18 the following new sentence: "The Administrator may 19 also reimburse such agencies for work performed by their 20 subcontractors where such work has a direct relationship 21 to the requirements of chapter 34, 35, or 36 of this title, 22 and has had the prior approval of time Administrator."; 23 and 24 (2) by amending subsection (b) to read as follows: 25 "(b) The allowance for administrative expenses incurred PAGENO="0315" 2935 39 1 pursuant to subsection (a) of this section shall be paid in 2 accordance with the following formula: "Total salary cost remisburs- Allowable for administrative able under this section expense $5,000 or less $600. Over $5,000 but not exceed- ing $10,000 $1,080. Over $10,000 but not ex- ceeding $35,000 $1,080 for the first $10,000 plus $1,000 for each additional $5,000 or fraction thereof. Over $35,000 but not ex- ceeding $40,000 $6,535. Over $40,000 but not ex- ceeding $75,000 $6,535 for the first $40,000 plus $865 for each additional $5,000 or fraction thereof. Over $75,000 but not ex- ceeding $80,000 $12,960. Over $80,000 $12,960 for the first $80,000 plus $755 for each additional $5,000 or fraction thereof.". 3 SEC. 504. Section 1775 of title 38, United States Code, 4 is amended- 5 (1) by striking out the period at the end of sub- 6 section (a) and inserting in lieu thereof "which must be 7 certified as true and correct in content and policy by an 8 authorized representative of the school. The catalog or 9 bulletin must specifically state its progress requirements 10 for graduation and must include as a minimum the infor- 11 mation required by section 1776 (b) (6) and (7) of this 12: title." 13 (2) by inserting at the end of the first sentence of PAGENO="0316" 2936 40 1 subsection (b) the following: "and must include ~ts a 2 minimum (except for attendance) the requirements set 3 forth in section 1776 (c) (7) of this title.". 4 Si~o. 505. Section 1780 (a) of title 38, United States 5 Code, is amended- 6 (1) by striking out at the end of clause (1) "or"; 7 (2) by striking out at the end of clause (2) the 8 period and inserting in lieu thereof ";"; ~nd 9 (3) by inserting immediately after clause (2) the 10 following new clauses: ii "(3) to any eligible veteran or person for auditing 12 a course; 13 "(4) to any eligible veteran or person for a course 14 for which the grade assigned is not used in computing 15 the requirements for graduation including a course from 16 which the student withdraws unless the Administrator 17 finds there are mitigating circumstances; and 18 "(5) to any eligible veteran or person for pursuit 19 of the correspondence portion of a combination cor- 20 respondence-residence course leading to a vocational 21 objective if the correspondence portion is completed in 22 less than 6 months.". 23 Sno. 506. The last sentence of section 1780 (a) of title 24 38, TJiiiited States Code, is amended to read as follows: "Not- 25 withstanding the foregoing, the Administrator may, subject PAGENO="0317" 2937 41 1 to such regulations as the Administrator shall prescribe, con- 2 tinue to pay allowances to eligible veterans and eligible per- 3 sons enrolled in courses set forth in clause (1) or (2) of this 4 subsection- 5 "(A) during periods when the schools are tern- 6 porarily closed under an established policy based upon 7 an Executive order of the President or due to an emer- 8 gency situation, and such periods shall not be counted 9 as absences for the purposes of clause (2) 10 "(B) during periods between consecutive school 11 terms where such veterans or persons transfer from one 12 approved educationa,l institution to another approved 13 educational institution for the purpose of enrolling in and 14 pursuing a similar course at the second institution, pro- 15 vided the period between such consecutive terms shall 16 not exceed 30 days: And provided further, That such 17 periods shall be counted as absences for the purposes ~f 18 clause (2) ; or 19 "(0) during periods between a semester, term, or 20 quarter where the educational institution certifies the en- 21 roliment of the eligible veteran or `eligible person on an 22 individual semester, term, or quarter basis, providing the 23 interval between such periods does not exceed 1 full 24 calendar month and provided further that such periods PAGENO="0318" 2938 42 1 shall be counted as absences for the purposes of clause 2 (2).". 3 SEc. 507. Section 1784 (a) of title 38, United States, 4 Code, is amended by adding at the end thereof the following: 5 "The date of interruption or termination will be the last 6 date of pursuit or in the case of correspondence training 7 the last date a lesson was serviced by the school.". 8 SEc. 508. Section 1784 (b) of title 38, United States 9 Code, is amended by striking out "$3" and "$4" and insert- 10 ing in lieu thereof "$5" and "$6", respectively. 11 S~c. 509. Section 1789 of title 38, United States Code, 12 is amended- 13 (1) by inserting at the end of subsection (b) (3) 14 "or"; 15 (2) by striking out subsection (b) (4) 16 (3) by redesignating subsection (b) (5) as sub- 17 section (b) (4) ; and 18 (4) by adding at the end thereof a new subsection 19 (c) as follows: 20 " (c) Notwithstanding the provisions of subsection (b) 21 (1), (2), and (3) of this section, the provisions of sub- 22 section (a) shall apply to any course offered by a branch or 23 extension of- 24 "(1) a public or other tax-supported institution 25 where the branch or extension is located outside of the PAGENO="0319" 2939 43 1 area of the taxing jurisdiction providmg support to such 2 institution; or (2) a proprietary institution where the l)ranch or 4 extension is located beyond the normal commuting dis- tance of such institution.". 6 SEC. 510. Section 1792 of title 38, United States Code, ~ is amended1- 8 (1) by inserting in the last sentence "on a regular basis" after "shall"; and 10 (2) by striking out in the last sentence "from time- to-time" and inserting in lieu thereof "which shall meet 12 at least semiannually". 13 SEC. 511. Subchapter II of chapter 36, United States 14 Code, is amended- 15 (1) by repealing section 1793; and 16 (2) by striking out in the table of sections at the 17 beginning of chapter 36 of such title "1793. Institutions listed by Attorney GeneraL". 18 SEC. 512. Subchapter II of chapter 36, United States 19 Code, is amended- 20 (1) by repealing section 1795; and 21 (2) by striking out in the table of sections at the 22 beginning of chapter 36 of such title "1795. Limitation on period of assistance under two or more programs.". PAGENO="0320" 2940 44 1 Sno. 513. Section 1796 of title 38, United States Code, 2 is amended- 3 (1) by redesignating `subsections (b) and (c) as 4 (c) and (d), respectively; and 5 (2) by adding new subsection (b) `as follows: 6 "(b) To insure compliance with this section any insti- 7 tution offering courses approved for the enrollment of eligible 8 persons or veterans shall maintain a complete record of all 9 advertising, sales, or enrollment materials (and copies there- 10 *of) utilized by the institution during the preceding 12-month 11 period. Such record shall be available for inspection by the 12 State approving agency or the Administrator. Such materials 13 shall include but are not limited to any direct mail pieces, 14 l)rochures printed literature used by sales persons, films, 15 video tapes and audio tapes disseminated through broadcast 16 media, material disseminated through print media, tear 17 sheets, leaflets, handbills and fliers together with `any sales 18 manuals for instructions to salesmen.". 19 ` SEc. 514. Chapter 36 of title 38, United States Code, 20 is amended- 21 (1) by striking out in section 1771 (a) "his" and 22 inserting in lieu thereof "such"; 23 (2) by striking out in section 1775 (a) "he" and 24 inserting in lieu thereof "the Commissioner"; 25 (3) by striking out in subsections (b) and (c) of PAGENO="0321" 2941 45 section 1777 "he", "him", "his" each time they appear 2 and inserting in lieu thereof "the veteran or person", 3 "the veteran or person", and "such veteran's or per- 4 son's", respectively; 5 (4) by st.i~king out in section 1779 (ii) "his" and 6 inserting in lieu thereof "the Administrator's"; 7 (5) by striking out in subsections (a) and (b) of S section 1780 "his", "lie", "wife or widow", and "wife's 9 or widow's" each time they appear and inserting in lieu 10 thereof "such veteran's or person's", "the Administra- 11 tor", "spouse or Surviving spouse", and "spouse's or 12 surviving spouse's", respectively; 13 (6) by striking out in subsections (c) and (d) of 14 section 1780 "his" and "he" each time they appear and is inserting in lieu thereof "such veteran's or person's" and 16 "the veteran or person", respectively; 17 (7) by striking out in section 1780 (f) "him" and 18 inserting in lieu thereof "such veteran or person"; 19 (8) by striking out in section 1780 (Ii) "he" the first time it appears and inserting in lieu thereof "the 21 Administrator" and by striking out "lie" the second 22 time it appears and inserting in lieu thereof "time veteran 23 or person"; 24 (9) by striking out in section 1781 "him" and in- 23 serting in lieu thereof "such person"; 78-226 0 - 77 - 21 (Pt. 4) PAGENO="0322" 2942 46 1 (10) by striking out in section 1783 (a) "his" and 2 inserting in lieu thereof "such officers or employees"; 3 (11) by striking out in section 1783 (b) "he" 4 the first time it appears and inserting in lieu thereof 5 "such person" and by striking out "he" the second time 6 it appears and inserting in lieu thereof "the Administra- 7 tor"; 8 (12) by striking out in section 1783 (d) "he" and 9 inserting in lieu thereof "the Administrator"; 10 (13) by striking out in subsections (a) and (b) of 11 section 1784 "him" each time it appears and inserting in 12 lieu thereof "the Administrator"; 13 (14) by striking out in subsections (a), (b), and 14 (c) of section 1786 "wife and widow" and "his" each 15 time they appear and inserting in lieu thereof "spouse or 16 surviving spouse" and "such veteran's or spouse's", 17 respectively; 18 (15) by striking out in subsections (a), (b), and 19 (d) of section 1790 "he" each `time it appears and insert- 20 ing in lieu thereof "the Administrator"; 21 (16) by striking out in subsections (a), (b), and 22 (c) of section 1791 "his" and "he" each time they ap- 23 pear and inserting in lieu thereof "the veteran's or per- 24 son's" and. "the Administrator", respectively; PAGENO="0323" 2943 47 1 (17) by striking out in section 1794 "his" and 2 inserting in lieu thereof "the Administrator's"; 3 (18) by striking out in section 1796 (b) "his" and 4 inserting in lieu thereof "the Administrator's"; 5 (19) by striking out in section 1798 (b) "he" and 6 inserting in lieu thereof "the veteran or person"; and 7 (20) by striking out in subsections (e) and (d) of 8 section 1798 "he" and "his" each time they appear and 9 inserting in lieu thereof "the Administrator" and "the 10 Administrator's", respectively. 11 TITLE VT-VETERANS' EMPLOYMENT 12 ASSISTANCE PROVISIONS 13 Sno. 601. (a) Section 2002 of title 38, United States 14 Code, is amended by inserting "by an Assistant Secretary of 1~ Labor for Veterans' Employment" after "promulgated and ~ administered". 17 (b) Chapter 41 of title 38, United States Code, is 18 amended- 19 (1) by adding after section 2002 a new section as 20 follows: 21 "~ 2002A. Veterans' Employment Service; Assistant See- 22 retary of Labor for Veterans' Employment 23 "There is created within the Department of Labor a 24 separate agency to be known as the Veterans' Employment PAGENO="0324" 2944 48 1 Service. Such agency shall be headed by an Assistant Secre- 2 `tary of Labor for Veterans' Employment who shall be re- 3 sponsible, subject to the supervision and control of the Secre- 4 tary of Labor, for carrying out the policies and purposes of 5 this chapter."; and 6 (2) by amending the table of sections at the begin- 7 ning of chapter 41 of such title by inserting below "2002. Purpose." 8 the following: "2009k. Veterans' Employment Service; Assistant Secretary of Labor for Veterai~s' Employment.". 9 (c) Section 2 of the Act of April 17, 1946, as amended 10 (29 U.S.C. 553), is amended- 11 (1) by striking out "five" in the first sentence of 12 such section and inserting in lieu thereof "six"; and 13 (2) by adding at the end thereof a new sentence 14 as follows: "One of such Assistant Secretaries of Labor 15 shall be an Assistant Secretary of Labor for Veterans' 16 Employment.". 17 (d) Paragraph (20) of section 5315. of title 5, United ~ States Code, is amended by striking out "(5)" and insert- 19 lug in lieu thereof " (6) ". 20 SEc. 602. Section 2003 of title 38, United States Code, 21 is amended- 22 (1) by inserting "or by prime sponsors under the PAGENO="0325" 2945 49 1 Comprehensive Employment and Training Act" after 2 "programs administered by the Secretary"; 3 (2) by striking out in clause (5) "and"; 4 (3) by redesignating clause (6) as clause (7); and 5 (4) by inserting new clause (6) as follows: 6 "(6) promote the participation of veterans in Corn- 7 prehensive Employment and Training Act programs and 8 monitor the implementation and operation of Compre- 9 hensive Employment and Training Act programs to 10 assure that eligible veterans receive special consideration 11 when required; and". 12 SEc. 603. Section 2006 (a) of title 38, United States 13 Code, is amended by inserting in the last sentence "each" 14 after "shall". 15 SEc. 604. Section 2006 (a) of title 38, United States 16 Code, is amended by inserting after "eligible veterans" 17 "eligible persons". 18 SEc. 605. Section 2007 of title 38, United States Code, 19 is amended- 20 (1) by striking out in subsection (a) "his" and in- 21 serting in lieu thereof "such veteran's and eligible per- 22 son's"; 23 (2) by inserting in subsection (c) "and public serv- 24 ice employment" after "occupational training"; and PAGENO="0326" 2946 50 (3) by striking out in subsection (c) "or 2006" and 2 inserting in lien thereof ", 2006, or 2007 (a) ". 3 SEc. 606. Section 2012 of title 38, United States Code, 4 is amended by adding paragraph (c) as follows: "(e) The Secretary shall include as part of the annual ci report required by section 2007 (c) of this title the number 7 of complaints filed pursuant to subsection (b) of this section, 8 the actions taken thereon and the resolutions thereof. Such 9 report shall also include the number of contractors listing io suitable employment openings, the nature, types, and number ii of positions listed and the number of veterans receiving prior- 12 ity pursuant to subsection (a) (2) of this section.". 13 SEC. 607. Chapter 41 of title 38, United States Code is 14 amended- i~5 (1) by striking out in section 2003 "he" and "his" 16 and inserting in lieu thereof "the Secretary" and "such 17 representative's", respectively; 18 (2) by striking out in section 2004 "his" and in- 19 serting in lieu thereof "such representative's" and by 20 inserting "or eligible persons" after "eligible veterans"; 21 (3) by striking out in section 2005 "he" and insert- 22 ing in lieu thereof "the Secretary"; and 23 (4) by striking out in section 2008 "his" and "him5' 24 and inserting in lieu thereof "the Secretary's" and "the 25 Administrator", respectively. PAGENO="0327" 2947 51 1 SEc. 608. Chapter 42 of title 38, United States Code, is 2 amended- 3 (1) by striking out in section 2011 "his" and insert- 4 ing in lieu thereof "the person's"; and 5 (2) by striking out in section 2012 (b) "his" and 6 inserting in lieu thereof "the contractor's". 7 S~c. 609. Chapter 34 of title 38, United States Code, is 8 amended-. 9 (1) by striking out in section 2021 (a) "his" each 10 time it appears and inserting in lieu thereof "the 11 employer's"; 12 (2) by striking out in section 2021 (b) "his" and 13 "he" and inserting in lieu thereof "the person's" and 14 "the person", respectively; and 15 (3) by striking out in section 2024 (d) "his" each 16 time it appears and inserting in lieu thereof "such 17 employer's". 18 TITLE Vu-MISCELLANEOUS AND 19 EFFECTIVE DATE 20 SEc. 701. Section 3101 (a) of title 38, United States 21 Code, is amended by adding at the end thereof the follow- 22 ing: "For the purposes of this subsection, in any case where 23 a payee of an educational assistance allowance has designated 24 the address of an attorney-in-fact as the payee's address for 25 the purpose of receiving his or her benefit check and has also PAGENO="0328" 2948 52 1 executed a power of attorney giving the attorney-in-fact 2 authority to negotiate such benefit check, such action shall 3 be deemed to be an assignment and is prohibited.". 4 SEC. 702. Except as otherwise provided, the provisions 5 of this Act shall become effective on October 1, 197G. PAGENO="0329" 2949 [No. 120] COMMITTEE ON VETERANS' AFFAIRS, U~S. SENATE VETERANS' ADMINISTRATION, OFFICE OF THE ADMINISTRATOR OF VETERANS' AFFAIRS, T'Vas/tinqton, D.C., July 23, 1976. Hon. VANCE HARTKE, Chairman, Committee on Veterans' Affairs, U.AS. &nate, JVathin.gton, D.C. DEAR Ma. CHAIRMAN: This will respond to your request for a report by the Veterans' Administration on Senate Amendment No. 2005, in- tended. as a substitute for the language now contained in B. 969, .94th Congress. The substituted language woul'd.be known as the "Veterans' Education and Employment Assistance Act of 1976." Senate Amendment No. 2005 is a comprehensive. proposal, the. major provisions of which would. (1) increase by 8 percent educational assist- ance allowance rates for veterans, their dependents and survivors; (2) teiininate the current C-I `bill for most individuals entering the armed~ services on or after January 1, .1977; (3) enact a new chapter 32 in title 38, establishing a contributory-matching C-I bill education pro- gram for entrants into the peacetime, All-Volunteer Force on or after January 1, 1977; (4) provide that, should conscription be reinstituted in the future, entrants into theArmed Forces during any period that a draft is in effect will be entitled. to education benefits under chapter 34; (5) extend basic educational assistance entitlement for veterans, their dependents and survivors from 36 to 45 months; and (6) create within the Department of Labor a new agency to be known as the Veterans' Employment Service, to be headed by an Assistant Secretary of Labor. In addition, the: Amendment includes a number of other provisions, most of which are directed to improving the management of current Veterans' Administration education programs. The views of the Veterans' Administration on the changes in law proposed in the Amendment are detailed in the enclosed section-by- section analysis. However, we would like to address briefly the major pi~ovisioiis of the Amendment in this letter. The Veterans' Administration favors~ the benefit rate increases pro- posed in the Amendment. We believe that increases in the amount proposed are warranted in view of changes in the costs of training since the last general rate increases authorized in Public Laws 93-~508 and 93-602. We strongly support termination of current education `benefits for new entrants into the peacetime, All-Volunteer Force. The primary purpose of all GI bill education programs has been to assist veterans to make the transition from military to civilian life by helping them get the education they might have received had they not served their PAGENO="0330" 2950 2 country in a time of national emergency. The World `War II and Korean conflict programs were terminated shortly after the c~e.ssation of hostilities. `With the official end of the war in Vietnam in May 1975, it is appropriate to terminate the Vietnam-era programs. We are strongly opposed to the proposed new chapter 32, the stated purpose of which is "(1) to provide educational assistance to those men and women who enter the Armed Forces after December 31, 1976; (2) to a:ssi~t such individuals in obtaining an education they might not othei.~wise be able to afford; and (3) aid in attracting qualified men and women into mihtar~ sen ice " lie piopc~ccI progi'im icfiects `t radica.lL~_~~and in our view unjustified-departure frdm the time-lion- ored practice. of providing'VA readjustment benefits to those who e sufieied a serious disiuption in the'i in es ii~ the couise of sen ing their countr3 `We cm see no justiflc~tion foi nqmimg the Vetrians Administration to fund and administer ~. pI~Ogram whose stated pun- pose is' to provide educational assistance to individuals who have chosei~ toenteimilit~uy service in the s~ine way nieii awd. women chOose en ihan jobs, `md to `tssist the Depaitmcnt of Defense in iccnnting :..WTe~wojild~oint~~iit that the. Federal GOvernment has~ mnny pro- grams designed th help i.iiclivithi:ais, particularly, those in financial need~ obtain' an `educCtion. All-Volunteer Force ve1erans~ can avail thethseivès of the numerOus, readily available opportunities for edu- C~tionalassistahce that. now' exi~t: Any educatiOnal programs designed to aid AlhVolunteer Force recruitment., we would suggest, should be funded by the Department of Defense so that. they call be structured t.o meet the specific .nee~ they are designe.d to serve. and' integrated into an overall recruitment strategy which takes into, account other incentives now `iii `ulabie, including compenc~ition competitn e w ith th't~t in the civilian sector, programs of i'nservice education, and spe- cial bonuses; :. . ., .~ . . . . .~ . . . .... We also opposC the provision which would automatically `reinstate chapter34.'benefits should thedraft be reimposed. The conditions under which such. a ~step. might be taken vary radically, and we think rea- soned policy decisions regarding veterans benefits ap~ropniate under a draft can only be. made when the circumstances surrounding the de~ cision tO'lreinstitute. the draft are known and can be assessed. It ha.s been the consi.stent view of the Veterans' Administration that thB basic education entitlement .peniod of 36 months, which is sufficient time to'compiete an undergraduate degree or.vocational.program, ade- quately meets. the needs the readjustment program is designed. to serve. We, therefore, oppose the ~provision in the Amendment that would grant. 45 months of entitlement to all beneficiaries. ~. Our views on the other provisions of the Amendment, most of wh.ich we support, as well as additional details on.our views of t.he provisions discussed above~ are in. the enclosed analysis. Also enclosed are detailed cost estimates. We `defer to the Department of Labor On the~ establishment of a new agency to be known as the Veterans' Employment. Service,.to he headed by an Assistant Secretary of Labor. . . . . .. . We are advised by the Office of Management and Budget that thei e is no objection to the presentation of this report and that tei min'i~ion PAGENO="0331" 2951 3 of the. GEhi11~for~fiiture entrants into. th ined.Foices~would be in `iccord with the progi'tm of the President Sincerely, ODELL W \`AtCii~, Depdtq Adn2 rustratoi (In the absence of Richard L Roudebush, Administ~ ate ) Enclosures SECrEON ~r SEcTIoN ANALYSIS OF SENATE AMENDMENT No ~O05 (SLBSTITIIT TOP s )69~ 94i~H CO~RFsS) The first section of the proposal provides that the Act may be cited as the "Veterans Education and Emplo~tthent Assistance Act of 1976." TITLE F-CHAPTER 31 DISABLED VETERANS'.~VOCA- TIONAL REHABILTIAFION RATE AND PROGRAM AD JLTSI MENTS Section 101 v~ ould amend the table contained in section 1504 (b) of title 38 to provide an 8 percent increase in benefits paid to disabled veterans pursuing programs of vocational rehabilitation under chap- ter 31... The Vetei `ins' Administration f'tvors benefit rate increases in our vocation'il rehabilitation and educational training prOgrams The last geneini i ate change, authoi ized in Public Law 9Q-SO8~ effective Sep- tembei 1, 1974, provided an increase of `tpprOximately 23 percent for institutional training under chapters 34 and 35, as well as an increase of approximately 18 percent for the other educational programs an- thoiized under chapters 31, 34, 35, and 36 Public Law 93-602, effec tive Januaiy 1, 1975 equalized the r'tte increase at 23 percent for those beneficiaries not recei~ ing the full mci ease We behe~ e that a rate mci ease of the amount provided in the pro- po'~'il would be waii anted at this time in view of changes in cost of t~ aining since the enactment of Public L't~ s 93-508 and 93-602 a numbem of months ago The estimated cost of the 8 percent rate increase provided by this section is meflected in the rate incie'ise table which is attached to this anal3 si~ Section 102 of the propos'ml w oulci amend `~ection 150~3 (c) of title 38 to repeal the June 30, 197~, teimination date provided in current law for the training of blinded `ind seriously dis'ibled veterans of World War II and the Korean conflict In lieu of this date, the pro posal would pros ide discretionary `uithority for the Administrator to extend entitlement for such periods as he deems appropriate We would point out that, as a result of the June `30, 1975, teimina tion date, some seriously disabled veterans then in training were cut off from Veterans' Administi `ition benefits before they had completed the training they needed to regain employability In addition, seri- ously disabled veterans of these ~ ar periods who hive not yet entered PAGENO="0332" 2952 4 training, but who will need training in the years ahead, such as those whose disability has prevented their entrance into training, and those whose service-connected conditions have worsened, would be aided by the proposed change in the law. The substitutic~ of the discretionary authority will permit the Vet.- cians' Administration to aid these deserving veterans in regaining employability For these. reasons, we favor this section of the proposal. it is estim~ ted that, if this section of the proposal were to be en- acted, it wou'd result in additional direct benefits cost in fiscal year 1977 of $1,600,000 and n additional direct benefits cost for the first 5 fiscal years of $7.4 miilion. A detailed table setting forth the number of trainees who would be affected and the cost by fiscal year over the next 5 years follows: [Dollar amounts in millionsl Direct . Fisr~! year . . Trainees benefits cost 1977 1978 .. .. 1979 1980 1981 Total 475 450 425 400 375 $1.6 1.6 1.5 1.4 1.3 7.4 Section 103 of the proposal, would amend section 1511 of title 38 to peunit chaptei 31 tiamees to be tiained in facilities of a Feder'il agency Oil an uncompensated basis Winle pursuing such training, the vetci an would not be considered a Federal employee for the purposes of laws adnunistered by the Crt ii Sei vice Commission (annual leave, sick leav e, retirement, insurance, etc), but would be considered an em plo~ ec for the purposes of the benefits of chapter 81 of title S (in iuiies on the job) of the United States Code Under the provisions' of the Fair Labor Standards Act, `chapter 31 trainees may not be utilized as unpaid employees. In the'enactment .of Public Law 93-11~, the "Rehabilitation Act of 1973," the Congress l)eilflitted State vocational tiarnees to be utilized in Federal facilities on . an unpaid basis without coverage under the Federal Employees Compensation Act. Under the change proposed here, chapter 31 dis- abled veterans would have available to them: (a) The same potential training facilities with Federal agencies now granted to State trainees, thus `affording theni increased opportunity for Federal' employment, and (b) coverage' under the, Federal `Employees, Compensation Act. We feel that severely ~disabled veterans in the chapter 31 program should. be given the opportunity to prove that they are competent em- ployees without charge to the employing `agency, and, therefore, we approve `that part of section 103 which would exempt chapter .31 traine~s from the purposes of laws administered by the Civil Service Commission. However, since these trainees would not be paid a wage, and are similar in that respect t.o the State vocational trainees men- tioned. above, `we feel that it is not `within the intent of the Federal Employee Compensation Act to provide coverage in that circumstance. Therefore, we do not support that portion of section 103 which `would provide coverage under chapter 81 of titleS. PAGENO="0333" 2953 5 It is estimated that on1~ a small, number of chapter 31 trainees would be utilized pursuant to this authority Theiefore, any added cost of this piovision would be minimal Section. 104 would make a number of gender changes in chapter 31 of title 38, and w e fa\ 01 the dnanges TIILE II-VE1ERANS EDUCATION RATE AND PROGRAM ADJUS1MENTS Section 201 of the pioposal would piovide iate incieases of appioxi niately 8 pci cent in m'iny of the educational piogiams pio~ ided undei the GI bill.: Clause (1) would amend the table contained in paragraph (1) of section 1682(a) *of title 38 to reflect the~8 percent increase. in the rates of education2l `~ssistance paid to veterans puisuing full time, thi,ee quaiter time, and half tune instiitution'd tiainin~, piogiams and to those `veterans pursuing cooperative training. The same increase is included in the added dependency 1 ates paid to vetei ans w ith depend ent~ pursuing such types of training Clause (2) would `amend section 1682(b) to include the .8 percent increase in benefits for servicemen pursuing programs of educatiOn under chapter 34 and to those veterans pursuing training on a less than half-time basis. Clause (3) would `amend section 1682(c) to reflect the 8 percent in- crease in the benefit rates paid to veterans pursuing éooperative train- ing, iiicluding dependency allowances. ` . Clause (4) ivould amend section 1696(b) to include'servicemen pur- suing Predischarge Education Program (PR:EP).. cOurses in the group wh~ would benefit from this increase.' ` ` ` The Veterans' Administration favors an increase in the current edu- cational assista.nce allowances payable to veterans. Our.position in sup- port of'the increase is set forth in our discussion of section 101 `of this analysis. The cost of the increases provided by this:section,bf the pro- posal. is included in the cost estimate attached to this analysis. Section 202 `would amend section 1652 `of title 38 to add' new' defi- nitions' in chapter 34 to define "institution. Of higher learning" and "standard collegedegree." ` ` . ` Title, 38 does not include these' definitions..~ The.'result is .a broad cla~sification of institutions of higher learnmg zind standard college (legree' `by Federal `agencies administering educational prOgrams-to the~* detriment, of' veterans. Some institutions are `granting their stu- dent~s a `document they refer to' as a "college degree," even though `the document; normally would `not be re~ogflj~~~ by gia.duate or profes- sional schools. We believe that setting' out a~ definition Of "standard college degree" will eliminate many problems now faced' by veterans as they venture into employment or future education. We believe that .clarjficatioiz of the defini'tion:of what is an `institu- tion of' higher learning would assist: the `Veterans' Administration in its relationships with institutions in the educatiOnal community. For these ieasons we favor the changes pioposed to be made b~ this section of the substitute measure No addition'iJ cost would be ifl% oh ed if this section were to he enacted. ` ` PAGENO="0334" 2954 6 Section 203 would amend. section 1661 of title 38 to permit veterans who are basically entitkd to 36 months of educational assistance up to 45 months of benefits for pursuit of educational programs without limitation to baccalaureate degree pursuit as presently set forth inthe law. It would also permit up to 45 months of assistance for those vet- erans who served less than 18 months, but who were discharged be- cause of a service-connected disability. Educational assistance under chapter 34, except for PREP and educationally disadvantaged (where no entitlement is charged), would be limited to 45 months. The Veterans' Administration has consistently taken a position in opposition to any extension of the amount of entitlemeiit granted to veterans. We see no reason at the present to change this posture. As we have pointed out many times in the past, the primary purpose of the 01 bill program has always been to provide assistance designed to aid the veteran who served his country in time of national emer- gency in readjusting. from military to civilian life. It is our view that a basic entitlement period of 36 months, which is sufficient time to complete vocational and 4-year college degree programs, is consistent with the purpose of the program. We would note that under current law, veterans who do not have a high school diploma, or who need refresher, remedial, or deficiency courses to qualify for enrollment in an appropriate eduéational program, may receive benefits for such pursuits without any charge against their entitlement. In addition, 01 bill beneficiaries who require more than 4 years to complete an approved undergraduate program may be granted up to 9 months of additional entitlement. Thus, under current law-, veterans who need idditional benefits in oider to g'un their basic educational require ments for employment can receive them. It was not the intent of the 01 bill program to take the individual beyond his undergraduate leveL Any fuither exteiisiOn' of entitlement is not consistent with the pur- pose of the program' and would involve substantialcosts. It is estimated `that enactment of section 203 (1) `of the. proposal would result in `added direct benefits cost of $253.2 million in `Fiscal Year 1977 and in' added direct'benefits cost of $521.4 milliOn over the. first 5' fiscal years. A' detailed `breakdown of these `5-year estimates follows: IDollar amounts in millionsj Direct Fiscal year , Trainees benefits cost 1977 146 500 $253 2 1978 80 000 138.2 1979 29,400 50.8 1980 25,000 43.2 1981 20, 800 36. 0 ,Total 521.4 In making these estimates, we have assumed an effective date for this proposal of October 1,. 1976, the 8 percent rate increase provided in this' substitute proposal', and' termination of the 01 bill and of flight train- ing as also provided therein. It has also been assumed that 50 percent of those who' have exhaUsted entitlement would reach their delimiting PAGENO="0335" 2955 7 date prior to the time they could benefit from this proposal. Likewise, 36 percent of those terminated would not benefit because of their de- limiting date. It was assumed, based on current entitlement usage, that 7 of the 9 months granted would be. used; that 10 percent of those ter- minated and exhausted would benefit (spread over the first two calen- dai periods eligible) ; that 3 percent of on-roll trainees (less those affected by termination of the current program) would take advantage of the extension in each fiscal year; and that an average cost of $1,600 would be involved per trainee. We believe that section 203(2), which would give 45 months of edu- cational assistance to those veterans who serve less than 18 months on active duty and are discharged because of a service-connected disabil- ity, is unnecessary. We already provide a' vocational rehabilitation program under chapter 31 of title 38 which grants rehabilitation bene- fits without regard to length of service. Veterans training under this program have all of their educational expenses paid for them-tuition, books, fees, supplies, et cetera-and, in addition, are granted a monthly subsistence. allowance. A veteran eligible for such training may receive up to 48 months in benefits and, in certain instances, longer. Thus, we believe that this proposal serves no established need. Section 204 would amend section 1662(a) of title 38 to provide a limited extension of the current 10-year eligibility period for pursuit of programs of education by veterans. The extension would~ be limited to those veterans who were prevented from initiating or completing their programs within the 10-year period because of a physical or mental disa.bili~y not the result of their `own misconduct. The extension would be, limited to that period of time the veteran was prevented from initiating or completing his prograrri, due to the physical or mei tal dis- ability. he Administrator would be required `tO make such,determina- tion. . While we have stated on numerous occasions that we are opposed to an across-the-board extension of the delimiting date, we believe that consideration should be given to the enact.nient.of. a provisi6n which would; extend' the'entitlement of `those eligible veterans who,, because they were incapacitated, through circum'stai~ces beyond their control, h'v~ . been unable to utilize then potentnd entitlement `We would rec omine'imd, however, `that more explicit language concerning.. the. length of time such an individual may receive an extension be. set forth in the provision~ -. ` ` ` . ` ` We believe `that any extension permitted under such a' `provision would apply', to only a limited number of veterans. Any' additional cost accruing from a limited extension would, we believe, be fairly minimal. It should be `pointed out that the Administration, in early' 1975,.rec- ommended legislation `which wouldreduce the 10 year eligibility period to 8 years, the same period of time allowed Korean veterans and which was provided. in the original version of the current program. Our rec- ommnendation was introduced as S. 817, 94th Congress, which is cur- rently' pending. before your Committee. `We urge that our proposal be given favorable consideration. Subsection (a) of section 205 of the proposal would amend or repeal various sections of chapter 34 of title 38 with the purpose of PAGENO="0336" 2956 8 terminating eligibility of veterans for Pursuit of flight training. Sub- section (b) is technical in nature and reflects in the table of sections at the be~inning of chapter 34 the repeal of section 1677-the basic flight training authorization section. Subsection (c) would amend two sections in chapter 36 of title 38 to delete references to flight training. Subsection (d) incorporates as savings provision designed to protect the benefits of those veterans enrolled in flight training pro- grams at the time basic eligibility for pursuit of such programs is ended. Veterans enrolled at that time would be permitted to continue pursuit of their programs through completion of the authorized ob- jective provided they remain continuously enrolled during such period of time~ The primary purpose of the GI bill education benefits is to assist veterans in adjusting from military to civilian life by helping them get the education they would have received had they not served their country in time of national emergency. Our years of experience in administering education programs have convinced us that flight train- ing courses have not fulfilled their intended purpose. There is ample evidence that the training does not lead to jobs for the majority of trainees and that the courses tend to serve as avocational, recreational, and/or personal enrichment, rather than basic employment objectives. Census Bureau figures for 1975 indicate, nationwide, that an average of 60,000 persons earn their living in occupations to which flight train- ing programs are relevant: Pilot, copilot, navigator flight engineer, mechanic, and flight instructor. Since 1967, more than double that number of flight program trainees-over 120,000-have received GI bill benefits, indicating that many who trained under the GI bill are not employed in occupations related to their flight training. Of the 600.000 persons working in aviation occupations, approxi- mately one-half are pilots or copilots for commercial airlines, a figure which has remained fairly constant since 1969. We understand that currently there are a large number of furloughed pilots who would be given preference in any hiring by the airlines. Thus, opportunities for employment in commercial aviation for flight school graduates are limited. General aviation opportunities, such as those for flight in- structors, tend to be part time. The majority of flight training hours are incurred on weekends, suggesting the veteran is regularly em- ployed during the week. Flight courses are expensive, typically aver- aging $3,010 to $6,070, and they rapidly use up the veteran's educa- tional entitlement. In addition, the most recent statistics show that only 60 percent of flight students training under the GI bill complete their courses. For the foregoing reasons, the Veterans' Administration favors the termination of flight training programs under the GI bill. It is estimated that enactment of this section would result in savings of $11.4 million in fiscal year 1977 and would result in savings of $68.5 milliOn over the first 5 fiscal years. A detailed breakdown of the savingsover the first 5 fiscal years, and numbers of trainees affected, follows: PAGENO="0337" 2957 9 [Dollar amounts in millionsj Fiscal year Trainees Cost savings 1977 7,500 $11.4 1978 8,400 12.7 1979 - 9,500 14.4 1980 9,900 15.0 1981 9,900 15.0 Total In estimating these savings, we utilized the estimated number of veterans expected to be in training as of September 30, 1976, the estimated number who would remain in training under the savings provision, and reduced by the number we had already budgeted as going into this form of training, and further reduced by those who would have been in this program of training except for the suspension of chapter 34 benefits for future veterans. In addition to favoring termination of flight training for the reasons stated above, we would, at. the same time, urge the Committee to give favorable consideration to concurrently terminating eligibility for correspondence training for veterans, wives, and widows. It is our position, based upon our years of experience in administer- ing education programs, that correspondence course training,, like flight training, has not fulfilled the intended purpose it is supposed to meet-the providing of training required for basic employment. It is our view that correspondence training is by far the weakest major part of the GI bill, since it does the least for veterans and inservice personnel toward providing vocational readjustment and restoring lost educational opportunities and aiding such persons in attaining the vocational and educational status they might otherwise obtain. Completion rates for correspondence courses are even lower than those. for flight training with the overall completion rate as of Decem- bei 31, 1974, being only 41.2. percent. This 4l.2-pei~cent' rate is an average, and includes complex, technical courses with completion rates as low as 5 percent, as well as courses with simple material with completion rates up to 60 percent. Correspondence courses generally `ne taken by persons who aie employed full time, indicating they are being used for purposes other than gaining the education required for b'msic employment, as intended It is our beh~f that I~ edmal assistance for our veterans, wives, and widows should be directed `towai'd' insti- tutional training and job training. . , . We, therefore, urge the Comnniittee to give favorable consideration to the termination, of correspondence training programs at the same time flight training programs are to be ended as proposed in S. 3109.which is before your committee. It is estimated that the cost savings which would result from term~- nation of correspondence training programs would amount to $18.9 million in fiscal year 1977 and would amount to'$68.6 million over the first 5 fiscal years. A table showing a breakdown of the estimated 78-226 0 - 77 - 22 (Pt. 4) PAGENO="0338" 2958 10 savings (in millions) by fiscal year and the number of trainees affected follows: Ch. 34 Cli. 35 Ch. 34 Ch. 35 Total direct Fiscal year trainees trainees savings savings benefit savings 1977 _.. 47,400 65 $18.9 $0016 $18.9 1978 48, 800 70 18 7 017 18. 7 1979 41,000 65 15.8 .016 15.8 1980 27700 60 10 6 015 10 6 1981 12,000 45 4.6 .011 4.6 5-yr total 68. 6 . 075 68. 6 _. _.__ ._ --- *_. _.__ Admimsti ative savings ~ hich ~i ould iesult from terrnin'ttion of the correspondence program are (in millions) as follows: - -. ,--- -- ----------` --- Administrative Fiscal year Man-year savings ___ -- ____ 1977 43.2 $0.6 1978 - 42.9 .6 1979 1980 24. 1 .3 1981 10.4 .1 5-year total 2.1 In arriving at these cost savings, we have included the effect of the 8- percent rate increase provided by this substitute proposal. Section 206 would amend section 1673 of title 38 to effectuate changes dea1ing with independent study programs and the so-called 85-15 rules. . - - - The first of these changes would amend section 1673 (a) to add a new clause (4) to bar approval of the enrollment of veterans in any independent study program except one leading to - a standard college degree. We would point out. that, at the time the current 01 bill program was enacted in 1966. the concept of independent study was not specifi- c'tlly considei ed by the Congiess Although this foun of study has been avail~tble `~t some unr~ ci sthes foi a numbei of years, it has not, until recently, piescnted pioblems th'~t could not be handled thiough iegulatory pioce~scs Foi example the Vteians' Admirnstiation paid benefits at the resident rate for this type of training from 1967 to December 1974. - `In December 1974, however, because of abuses of-the program which came to light.. th.e concept of payment was changed- by regulation. It has- always been the position of the Veterans' Administration that only programs of independent study leading to a standard college degree should be considered as -appropriate training under the 01 bill. For these reasons. we favor the proposed change made by this portion of this section. - - - We have no data available on which to base a' cost/savings estimate on this change. - The second substantive change proposed to be made by this section would be to amend section 1673(d) of title 38 to provide that all PAGENO="0339" 2959 11 courses Offered by educational institutions would be subject to the so-called 85-15 rule. Under curr~nt law (which has been in effect for many years), eligi- ble veterans are barred from enrolling in courses not leadmg to a *standard college degree offered by a proprietary profit or proprietary nonprofit educational institution, where moie than 85 percent of the students enrolkd~ therein are having all or part of their tuition, fees, or other charges paid to or for them by the educational institution or by the Veterans' Administration. The change PioPosed in this section. of the measure would extend the85-15 r~quirement to courses offered by all educational institutions and would inchide. grants made to students from any Federal agency. Tl~is would'include grants such as the Basic Educational Opportunity Grants and the ~Su'pplemental Educational Opportunity. Grants made by the Department of Health, Education, and Welfare. These are giants which (To not have to be repaid by the recipient. Th~ exemption for educationally disadvantaged and I PREP courses would be con~tni,ued. A number of accreclitedinst.itutions of higher learning have recently opened branch locationsin areas f~ir distant from their main campuses. The recruiting for these branch locations has been directed exclusively at veterans. It is our position that, if an institution of higher learning cannot. attract sufficient nonve'te.ran and n onsubsidjzed StudeiTits to its programs, it presents a great potential for abuse of our GI educa- tional programs. Thus, we also favor the second. change proposed in this: section, but would recommend that the provision be amended to allow discretion in the Administrator to waive the. 85-15 require- ment in the case of the HEWT grant programs cited above. This section includes a new provision exempting farm cooperative training, programs from the so-called 85-15 rule. The primary O1)jec- tive of the farm cooperative program is to provide meaningful in- struction for the farmer while concurrently engaged in. active agri- `cultural employment. Farm cooperative programs are generally of- fered by high schools, area technical schools, and community' colleges, and are frequently the result of the joint effort of the State~ Depart- Inent of Education, local school officials and county farm agents. These programs are designed primariiy'for veteran participation. We have found that, when an area is not serviced by an institution offering such a course, a group of' veterans' engaged in full-time, `farming has organized such. courses `with: the aid of `local groups .~for veteran participation.. .. ` , . ` .`..`.. . . WTe have no objection to the exclusion of such programs from the requirements of the 85-15 rule. No data is available on `which `to base any cost/saving, estimate. . . . Section 207 of Tthe proposal. would amend `section' 1.674 of title 38 to add a new definition, of unsatisfactory progress to be applied to the veterans education program. During compiiance surveys of schools conducted by the Veterans' Administration, many cases have been discovered whereby students register for class, receive educationa.l benefits from the Veterans' Administration, fail to attend class,' and. immediately prior t.o t.he. final examination for the course, withdraw PAGENO="0340" 2960 12 from the class. They then register for the same class the next school term. We believe that enactment of this provision would have the benefi- cial effect of curbing this abuse and would permit us to terminate benefits under such circumstances. We, therefore, favor this proposed change. No data is available upon which to base a savings estimate on this proposal. Section 208 of the proposal would amend section 1682 of title 38 to add a new subsection (e) incorporating into the law the present rates payable under our regulations *for pursuit of independent study courses. This change would gear the payment rate to the amount of resident training pursued in conjunction with such a course. It would provide statutory support for the procedure presently being followed by the Veterans' Administration through our regulations. The change proposed here, when taken in conjunction with the one proposed in section 206 of the proposed substitute measure (limiting pursuit by veterans to independent study courses leading to a standard college degree) would provide a better base for such pursuit and pre- vent abuses of the program. We, therefore, favor the proposal made by this section. There is no data available on which to base a cost/savings estunate. Section 209 of the proposal would amend section 1685 (b) of title 38 to allow a veteran-student, who has signed a work-study agreement to perform services for the Veterans' Administration, to complete his agreement (with approval by the Administrator) even though he ceases to be a full-time student. Under current law, a veteran may sign a work-study agreement to perform a set number of hours of service for the Veterans' Adminis- tration and receive advance payment for such `services up to a maxi- mum of. $250 for 100 hours. of service. In the event the veteran-student reduces his course load below the full-time level, or if he ceases to. be a student; his work-study agreement must be terminated. Where the veteran has not performed the number of hours represented by the advance payment to him, the amount of the advance payment which represents .the number of unworked hours is considered an over-pay- mént and must be collected from him. Our experience has indicated that a change such as is proposed here is needed in order tP `~ r~e; may fully carry out Congress' intent to utilize veterans in \iork-s~udy ~c~tions when the individual actually demonstrates a nee for assistr flee which the work-study program affords. For th~ son, we. support the amendment proposed in this section of the sr cute proposal. ` Any cost incurred by enactment of this proposal would be minimal. * Section 210 of the proposal wouiP make two changes in `section 1692 of title 3S. The first change would permit a veteran, pursuing a voca- tional cuarse, who has not received his high school diploma'or equiva- lencv ~rtific.ate. to be a~!orded tutorial assistance for that portion of the cc :` eo which deals with the academic, rather than the laboratory or shop~ segment. The second change would increase the: tutorial allow- ance peyable under thissection by 8 percent. " It ha's been determined that there are a few cases where an eligible individual is taking a vocational or technical course at an educational PAGENO="0341" 2961 institution, but has not received his high school diploma or equivalency certificate. In some cases, the institution requires the individual to pass an entrance examination. In others, it does not. Under current law, such an individual is not entitled to tutorial assistance. It is oui view that in these limited cases, where t.he individual is attempting to obtain job training through pursuit of a vocational course, but has not completed his secondary level training, and needs tutorial assistance in such areas as math, ieading, etc., in order to be aided in the classroom or theoretical, as opposed to the actual on-1ob, laboratory and shop portions of the course, the individual should be given this benefit. We would, however, be. opposed to extending this benefit to those areas which ares in reality, the actual manual types of instruction. `We note that the proposal would exclude high school and PREP courses. Any additional cost which might be involved as the result of enact- ment of the first change would be minimal. The cost of the second change is reflected in the rate increase table attached tothis report. Section 211 would make four technical amendments to various sec- tions of title .38. The first would strike out the words "United States. Code" in section 1652 (e) -an unnecessary reference; the second would strike out "section 1780" in subsections (a) a.nd (b) of section 1681 and insert in lieu thereof "chapter 36"; the third would redesignate section 1697A as section 1698; and the fourth would merely strike out the reference to section 1697A and substitute 1698 in the table of sections at the beginning of chapter 34. We would have no objection to any of these techmcftl changes Section 212 would make various gender .chamiges in chapter 34. of title 38., and we favor t.he changes. . . . . . . TITLE 111-CHAPTER 35 SURVIVORS' AND DEPENDENTS' EDUCATIONAL ASSISTANCE RATE AND PROGRAM ADJUSTMENTS . *. ~. Section 301 \%ould piovide 8 percent rate incieases in the case of dependents~ who are pursuiiig programs of cooperative, training and for ;those dependents who are pursuing full-time courses of special restorative training. Since the other benefit rates payable to depend- ents are incorporated by reference to tables contained in chapter 34, it is not necessary to amend any other portions of chapter .35 .to effec-' tuate the rate increase. The Veterans' Admmistration favOi~s an increase in' educational benefit ra.tes. Our views in support of the increase are set forth in section 101 of this analysis. The rate increases provided by this sec- t.ion of the measure are reflected in the table attached to this analysis. Section 302 would amend section 1701 (a) of title 38 to insert the same two new definitions in chapter 35 as would be incorporated into chapter 34 by the changes proposed t.o be made by section 202 of the proposal. Our reasons for favoring t.he changes proposed to be made in chapter 34 apply equally to the changes proposed to be made here affecting chapter 35. These changes would not involve any cost. Section 303 would make two changes in section 1711' of title 38. The first would allow 45 months of entitlement to dependents-_the same PAGENO="0342" 2962 14 as granted veterans under section 203 of the proposal. The second change would permit a limited amount of additional entitlement to those dependents who lose their eligibility under cha.pter 35 because the veteran parent or spouse is determined to no longer have a total disability permanent in nature, or the veteran parent or spouse who was listed as a prisoner of war, missing in action, or detained by a foieigii power is no longer so listed, as well as grant limited additional entitlement to those spouses of permanently and totally disabled vet- etans who are divorced without fault on their part. For the same basic reasons expressed in our discussion of section 203. we ai'e also opposed to the granting of 45 months of educational entitlement to dependents as provided in section 303 (1). rFl1e estimated cost of this pait of the proposal is as follows: [Dollar amounts in millions] Direct benefits Fiscal year Trainees cost 1977 5,000 $10.0 1978 4,100 8.2 1979 3,300 6.6 1980 3,300 6.6 1981 3,300 6.6 Total In making these estimates, we have used the same basic assumptions utilized in arriving at the cost estimate for the additional 9 months of b~néfits allowed veterans under section 203 of the proposed sub- stitute except that here we did not exclude the additional undergradu- ate costs already granted veterans not attaining their baccalaureate degree (not allowed dependents) and have assumed an average cost per trainee of $1,863. Under current law, where a dependent loses eligibility for the rea- sons set forth above and is enrolled in a program of education offered by an educational institutiOn not operated on a. quarter or semester system, the elig~bilit.y of such person may be extended to the end of the course or until 9 weeks have expired~ whichever first occurs. `fhe change proposed here would make this 12 weeks. This is the same amount of time granted veterans under chapter 34 where their en- titlement expires. Since the Congress has expressed its desire to equate benefits of chap- ters 34 and 35 wherever feasible, we see no objection to this proposed change in section 303(2). This change would involve only minimal cost. Section 304 proposes to make three changes in section 1712 of title 38. The fist change would recognize that dependent children should be granted a period of 8 years of eligibility in which to complete their programs of education rather than the 5-year period set forth in cur- rent law. The 5-year period reflects the former . requirement of corn- mencing a program at age 18 and completing it by age 23. Since the upper limit has now been extended to age 26, we believe it proper to have the 8 year period placed in the law and thus favor this change PAGENO="0343" 2963 15 The second change would restate the eligibility period available to dependents where their eligibility expires while they are enrolled in a program of education. This would permit a dependent,, whose eligi- bility expires after enrollment in school, the same amount of time granted a veteran under chapter 34 whose entitlement has expired while enrolled. We believe that this change, like that provided in sec- tion 303. would recognize the position of the Congress that dependents' benefits should, where feasible, be equated with those granted veterans. We, therefore, favor this change. The third change w-ould repeal subsection (d) of section 1712 which relates to extension of the eligibility period, of dependents for the period of time required to process their applications. We believe that the rccognition of the 8-year period, as opposed to the 5-year period (discussed in section 303 above), makes this provision of law unneces- sary. In addition, since payment of educational assistance may now be made. for a period of 1 year prior to the date of receipt of the enroll- ment certification, if otherwise payable, the additional eligibility be- cause of processing time is no longer necessary. We, therefore, favor its repeal. Any cost increase resulting from these changes would, we believe, be minimal. Section 305 of the. proposal would amend section 1713 of title 38 to provide that in the case of a dependent who has attained his or her legal majority, the application for chapter 35 benefits for such a de- pendent may be filed by the dependent. We have no objection to this provision. Theie would be no cost involved in this proposal. Section 306 would amend section 1723 (a) of title 38 to add a new clause (4) which would have the effect of barring approval of the enrollment of dependents in any inde~pendent study program except one leading to a standard college degree. The change proposed here would be equatable to that proposed for chapter 34 by section 206 of the proposal. The background. information cited in our discussion of that section of the proposal, as well as our reasons set forth there for sup- porting the change, are equally applicable to the change propOsed to be made here in cha;pter 35. No data is available on which to base any cost/savings estimate. Section 307 of the proposal would amend section 1274 of title 38 to insert the same standard of progress requirement as is proposed to be added to chapter 34 by section 207 of the proposal. The basis for our support of that section of the proposal is equally applicable to the change recommended here. No data is available on which to `base any cost/savings estimate. Section 308 would amend section. 1732(c) of title 38 to prescribe the rate of benefit payable to dependents for pursuit of independent study programs. The background discussion and our reasons for sup- porting' a similar change applicable to veterans, proposed t.o be made by section 208, are equally applicable to the change recommended here. No cost would be involved in conjunction with this proposed. change. Section 309 would make three technical changes in chapter 35 by substituting "Survivors' and Dependents' Educational Assistance" for PAGENO="0344" 2964 16 "War Orphans' and Widows' Educational Assistance~~; reflect such a title change in the tables of chapters at the beginning of title 38 and chapter 34, and substitute "chapter 36" for "section 1780" in section 1731 (a). We have no objection to these changes. No cost~ would be involved in these changes. Section 310 would make various gender changes in chapter 35 of title 38, and we favor the changes. TITLE IV-POST-VIETNAM ERA VETERANS' READJUSTMENT ASSISTANCE ACT Section 401 provides that the title Of this proposal may be cited as the "Post-Vietnam Era Veterans' Readjustment Assistance Act of 1977". Section 402 would amend section 1652 of title 38 to provide that no individual (with limited exceptions discussed below) entering service on or after January 1, 1977, could accrue benefits under the current GI bill program. The exceptions to this provision would be those indi- viduals who have enlisted in the Delayed Entry Program (DEP) prior to January 1, 1977, but who do not go on active duty until after that date. The other provision which would have an effect on this is the one contained in section 407 of the provision that would, in the event universal military training is reimposed by law, permit an indi- vidual entering military service after such date to be eligible for chap- ter 34 benefits and also permit the individual coming within the new chapter 32 (discussed later) to elect to remain under the new program provided by that program or elect to come under the reinstated chapter 34. The law (Pub. L. 89-358) establishing the current GI bill program provided educational assistance for eligible veterans who served on active duty in the Armed Forces after January 31, 1955. We believe that, with the end of hostilities in Vietnam in 1975, it is very appro- priate at this time to terminate the current educational readjustment program. This would, it should be emphasized, follow similar action taken to end the GI bill education programs for World War II and Korean conflict veterans. It should be emphasized that (1) the pri- mary purpose of all three GI bill programs has been to help veterans to adjust from military to civilian life by helping them get the educa- tion they might otherwise have gotten had they not served their coun- try in time of national emergency, and (2) those veterans training under the current program have had more eligibility time for pursuit of their programs of education than was granted to the earlier vet- erans. It was not contemplated that educational assistance was to be a continuing benefit. It is our view that approval of this provision of the proposal would make an equitable distinction between those who have been required to perform military service in wartime and those who in the future choose to serve in the peacetime All-Volunteer Armed Forces. Thus, we favor termination of the program. We would, however, urge the setting of a date beyond which bene- fits under the current program may not be paid, similar to that pro- vided in the House-passed bill (H.R. 9576) noted below. The pro- PAGENO="0345" 2965 17 posal set forth in the proposed substitute measure is open-ended, which means that the program could go on for many, many years until the last eligible is discharged and has had 10 years in which to com~ plete his or her program. A definite cut-off, date, which is what was provided in ending the World War II and Korean programs, is much more preferable. In our report to the House Committee on Veterans' Affairs dated July 15, 1975, on H.R. 6806, 94th Congress, a termination measure, we i~upported and supplied suggested draft language to allow GI bill benefits to those who enlist in the DEP program, but do not go on ective duty for a period of time thereafter. We would point out that the House of Representatives, in approving H.R. 9576, a substitute bill for H.R. 6806, did not see fit to include this provision. We continue to support it. The savings which would result from enactment of this proposal are set forth in the attachment to this report.. Section 403 of the proposal would amend section 1661 (a) of title 38 in. three respects. The first two changes would insert the proposed ter- inination date of the chapter 34 program into those provisions which relate to the computation of entitlement to benefits. Based upon the termination proposal contained in sect.ion 402, these would be pri- manly technical in nature. The third change would provide that, in computing the delimiting date for a person continuing to be eligible under the current c.hapter 34, based upon his entrance into active serv- ice prior to Ja.nuary 1, 1977, or if he had enlisted under the Delayed Entry Progriun uncl entered after flint date, the ending date of such an individual's eligibility under chapter 34 would be computed from the date of his or her first discharge or release from active duty after December 31, 1976. We would favor the third change since it would set an outer limit to eligibility and would not provide further extensions where the person re-enters active service subsequent to a discharge from the earlier period of service. We recommend deletion of the first two changes since they could be subject to misinterpretation as to the cut-off date for computing en- titlement. These changes do not involve cost. Section 404 of the proposal would enact a new chapter 32 in title 38, establishing a new Post-Vietnam Era Veterans' Readjustment As- sistanee program. The new program would be a contributory-matching educational program to which the eligible individual would contribute amounts from his monthly pay to be matched on a $2 for $1 basis by the Veterans' AdP~inistrat.ion. New section 1601 would define the purpose of' the new program as being one to provide educational assistance to men and women enter- ing military service after December 31, 1976, and to promote and `as- sist the all-volunteer military program' of the nation by attracting qualified men' and women to serve in the Armed Forces. New section 1602 prescribes various definitions which would govern t.he new program. The first would set the eligibility criteria for the new program as applying to those individuals entering military, service after December 31, 1976 (except for' those entering active duty after such date, but who signed up earlier under DEP) ,.who serve on active duty for a period of more than 180 days after such date and who re- PAGENO="0346" 2966 18 cei~ed `~ (hbCh'lLL~e 01 i~k i~e uiidei c ndit ons othci than dishonor ibic ol w ho entexed on ietn e duty aftei D emb 1 31 1976, ~nd w ere dis ix ged 01 x ele i~ed ~ftei such date foi ~ sex ~ ice COflfl( ctcd d~s ibiht3 Active dut~ \\ould not include ccxt~in ~ e~ of ~ei ixce such is sexi ne as a:cadet or.midshipmaii atone of the service academies, or certain s~uvice in the Nafional Guard or Reserves. rfhese are pattern~i after tim: iimitat.icifls currently contained in chapter 34. rfl~e terms "program * `of education" iin(i"edUcatiOnal iii st.itution" would have the `same mean- in~s1'ds fhos~ `currently set forth in chapter 34. The' term "participant" i~ defined as a person participating in the new 1)Iograrn. `"New section :1621 set~ forth eligibility in t~e new program. It allows those persons ehtering military service after 1)ecember 31, 1976, the right to enroll in the new program; requires participation in the new program for at least 12 consecutive months (except for hardship, or based' upon a. discharge) ; permits the individual to suspend or dis- enroll from the program at the end of any 12-month period; requires aix individual who .disenrolis to forfeit any entitlement except under limited conditions~ and permits those. who suspend to again participate subject to joint VA-1)epartment of Defense regulations. `New `section'~ 1622 sets the terms of the new matching-cpntril)Ut1011 formula. It. would require a participant to have no `less than $50,, nor more `than $75,' deducted from his monthly pay. The deducted amount `i~ould be.~deposited into a special fund in the U.S. Treasury. Following discharge `from .service~'the participant would be allowed to enroll in :sehool and receive `monthly benefits. For each $1 withdrawn monthly from theindividiia'l's account in the Treasury to assist in his education, the'~Veterans~ Adthinistr~tion would match the amount payable from th~it account on a $2 for $1 basis. The Secretary of Defense would,' :.uIic~I. this section".of the `proposed new chapter, be. permitted to con- tribute `such funds. to' any participant's account as he deems necessary mr,..app1~Qpriate.' ` ,.* * ` ``New sections 1623, 1624, and 1625 would set the basis for refunds of eo~itrihutions to participants' where they disenrohl from the program. If the individual diseprohls pixox to release ox dischai ge from ser~ ice, such individual's contributions will be refunded on the date of his release or discharge or within 60 days of disenroilment, whichever is later (unless based on hardship) If the individu'il thsenrolls after his :relëase' or `discharge~ the amount of his contribution will be refunded `to'.him' within 60 days of disènroilment.. In the event of the partici- `pant's death: while in service or after discharge, provisions are in- cluded as to the payment of such individual's contributions. New. section'.1631 provides that a participant would be entitled to a maximum' of ` 3~. monthly benefit payments; and sets the amount of *each"monthiy' payment b~ totaling the amount paid in by the partici- :`pant4 `the VA contributioxi amount, any a mount paid into the fund for the individual by~ the Secretary, and dividing the total by t.he number of months in which contributions were made by the participant This section ~also provides:that benefits may only be' used after the partici- panb hasbeen discharged from service; grants eligibility to partici- pants: to' Predischarge `Education Program (PREP) benefits under turrent Fo~ , sets the basis For the payment of benefits where the par PAGENO="0347" 2967 19 ticipant pursues a programof education .bycorrespóndenc~ ;~ and ~aut~ participants eligibility under the current education loan program New section 1632 provides that educational: assistance eoimki be Iro- vided under the program only during the first ~O years folIo~ring ~a participant's last dischaige or rele'rse from aoti~e duty, and provides that any unused contributions of a participant remaining ir~ the fund `ifter the 10 year period has expired shall be refunded to such mdi vidu2l follow rng notice to and receipt of an application from, such individual. New sections 1641 provides that the following sectiQns o~f chapter 34 of current law would be applicable to the program: 1663 (educa~- tional and vocational counseling), 167Q (selection of program) ,~ 1671 (applications and approval), 1673 (disapproval of. enrollmen.t in cer- tarn couises), 1674 (discontinuance for uns'itmsfactory conduct 01 progress), 1676 (education outside the United. States) ,i683 (approval of courses), 1685 (work-study program), ai~d 1695-1698.. (PREP.) It also provides that all provisions of chapter 36. of .~urrent law, with e exception of sections 1777 (approval of trammng on the job), 1780(c) (certifications of OJT training), and 1787 (apprenticeslup or other on-job training), would apply to the new.progra~.. New section 1642 requires the Administrator and. /the Secretary of Defense to designate appropriate individuals to be admmnistrptively responsible for carrying out an effective oufreach program ~to acquaint 11 military per sonnel and prospecti'~ e military per~onne1 of the bene- fits of the new program New section 1643 requires reports to the appropriate CQugressionaj committees on plans for implementation of the program and on its operations New section 1644 requires that deductron~ from rnthtaiy pay of par ticipants be piomp~ly deposited in the fund It `ilso requires the Dc p'iitinent of Defe~ise to submit monthly reports to the Veterans' Ad nnnisti `ition concermng such deductions as well `is drseiirollrnenjs and suspensions Section 405 of the proposed new substitute is technical in nature in th~t it meiel~ inserts the title of the new ch'rpter 32 at the begmn~m~rg ot title `38 `mcI at the beginning of Part III of title 3S Section 406 sets effective d'tte of the new chapter 32 `is Jarmuar~ 1 1977 Section 407 would pros ide th'it, in the e~ ent compulsomy military sei ~ ice iS i emm posed by law inch~ iduals entering actn~ duty on or `i±tei the efiectmi e date of such law would be eligible to accrue entitle merit to education `ml benefits provided by the c~luent GI b~ll, but would not be eligible under time new chanter 32 Participants in the new pro gram w `mId h'r~ e two options (1) The~ could elect to remain under the new progiam or (2) they could elect to come under the pm~i isions of the current GI bill If they elect the second option they would thea I e deemed to liai e disenrolled under the new progr'u~ `ind would h'tve `mn~ contributions refunded Their eligibility under the current (II bill Progi'tm would run from the d'ite of such election The Veterans' Admmmstr'rtion strongly opposes~ any provision which would create in the Veterans' Adfrninjstratjon~n, edncatiomprogram PAGENO="0348" 2968 20 for those individuals entering military servic&.'aft~r the termination date of the cunent program As noted `ibove, the stated purpose of the proposed new chaptei 32 is `to (1) provide educational assistance to those men and women who enter the; Arrned,Force's after December 31, 1976, (`2) to assist such individuals in obtaining an education they might not othei wise be able to afford, and (3) aid in attr'tcting qua Iificd men and ~ omen into military sei vice Ho~cvei, thc primary puipose~ of all GI bill piograms-Wolid `War TI, Koiean Conflict and \Tietn'tm cia-has been to help ~ cter `ins adjust frOm military to civilian life by helping them get the educa- tion they might otherwise have*~~gotten had they not served their coun- try iii a time of national emergency. The proposed new chapter 32 thus iepiesents a iadical-and in oui view un1ustified-dep'irtiiie * from the tiine-honoi~ed practice of providing VA readj ustnient bene- fits to those who have suffered a serious disruption in their lives in the course of serving their country We think a clear distinction c'tn and should be made between those veterans who have served in wartime when conscription was in effect and veterans who have chosen to serve * iii the Armed Forces in peacetime. Under the pioposal, individuals would not be entitled to utilize cn titleinent until they h'tve been disch'iiged from military seii ice We would point out that there aie many piogi'ims presently `ul'tbhe `through the Federal Government which would be of assistance to these mdii iduals These include the B'isic Educational Oppol tunit~ Grant progr'u~1 the Supplemental Education Oppoitunitv G ant prOgram, the College Work-Study program, and the Student Loan program administered by the Department of Health, Education, and Welfare. They also include the educational progran~s offered through the Law Enforcement Assistance Administration and the Department of Labor under the Comprehensive Employment Training Act. These `are only a few of the numerous educational programs which veterans would have open to them. * The Department of Defense presently has a number of educational programs available for inservice personnel. Such programs in them- selves serve as an inducement to recruit individuals to serve in the all-volunteer' armed services. The Department also has a number of other recruiting incentives, such as the higher pay awarded these volunteers which is designed to make their remuneration comparable ,to civilian salaries,' and' such things as enlistment bonuses. We would, however, defer to the views of the Department of Defense as to any benefit the program proposed here would have on recruiting The reasons set forth above are all `basic reasons why the Veterans' Administration opposes the proposed new program There are spe cific provisions in the new chapter which v~ e find particularly obi ectionable First, the proposal would call for administration and funding of the program by the Veterans' Administration It is our view that the Department of Defense, nOt the Veterans' Administration, should be the agency responsible for funding of any program which might be set up for these individuals. ` PAGENO="0349" 2969 21 Second, the program would provide eligibility for those entering service on or after January 1, 1977, for correspondence course training and would grant benefits for those in service under the current Pro- discharge Education Program (PREP). We have already addressed our position on correspondence train- ing in our discussion of section 205 of the proposal. Our arguments in favor of discontinuing correspondence training under current law would apply equally to providing any such form of training under the proposed new program. We also strongly favor elimination of PREP training from current law and urge the Committee to give serious consideration to this recommendation. The PREP program was established by Public Law 91-219, effec- tive March 26, 1970, and was designed to assist servicemen and women to prepare for their future education, training, or vocation by provid- ing them with the opportunity to enroll in and pursue a program of education or training prior to their discharge from active duty in the Armed Forces. The program is coordinated by the Veterans' Admin- istration and the Department of Defense. At the time PREP was established, recruitment for the Armed Forces followed a different philosophy from the present. In 1970', this country was still engaged in hostilities in Vietnam. Military require- ments were being met by drafting individuals when the services could not meet the requirements through voluntary establishments. In some cases, it was evident that individuals were in need of high school di- ploma courses, or remedial, deficiency, or refresher courses to prepare them to pursue an appropriate course of~ education or training in an appoved educational institution or training establishment following their release from service. It is our view that the continued need for PREP is no longer apparent. The educational programs developed by the Department of Defense; referred to earlier, are available to those individuals who are in the mihtaiy service `Lnd range `dl ~he w a'~ from voc'ttion'il tr'uning through graduate work. These Department of Defense programs can provide the means for obtaining high school diploma completion and/or remedial education, as required. The cost estimate for this proposed new chapter 32 is `set forth in the ~tt'tchment w Inch `tccompamcs this `uialvsis We would note that it is particularly difficult to project the' costs of a new program where we have no actual experience upon' which to base participation rates. In costing chapter 32, we have assumed a 10-percent participation rate, taking into account the historical `pat- terns of participation by those in present chapter 34 programs and the fact that fewer persons are likely to participate in a cOntributory program than a free benefit program. `The Department of Defense * may be in a position to provide other estimates of participation rates. We would point out that in the first 5 years of the program, differ- ences in participation rate assumptions have a relatively minor effect on costs as chapter 32 would provide postservice benefits `and expendi- tures for the program would not occur until those' who have made contributions have completed their terms of service Differences of PAGENO="0350" 2970 22 pnitkipation i'ate assumptions do have a significant impact. on out i~ear estimates~ however, with higher participation rates resulting in higher costs. We are opposed to the provision in section 407 which would auto- matically reinstat.e chapter 34 benefits should compulsory niiiitary service `be~ reinstated. We believe that the conditions under which such a. step might be taken vary radically. It is our view that reasoned policy decisions regarding veterans benefits appropriate under draft law conditions can only be made when the circumstances surrounding the, decision to reinstate the draft are known and can be assessed. TITLE. TV-ChAPTER 36 EDUCATION LOAN AND~ PROGRAM AI)MTNISTRATION AMENDMENTS Section 301 would prOVide, an 8-percent increase in the rates payable for the Pu~Su1t of correspondence training. It would also authorize.an 8~percent increase in the rates payable for pursuit of on-job and apprentice training programs. our position on rate increases is set forth in section 101 of this analysis. The cost of the rate increases provided by this section is included in the table. attached to this analysis. As we pointed out in our discussion of section 205, we favor ending the correspondence training program. Our basis for this position is outl med in the analysis of that section. Section 502 of the proposal would amend section 1798 to (a~ in- crease the amount of the student loan permitted by subsection (b) (3) froni $600 per school year to $1,200 per school year; and (b) provide that the interest rate charged for loans made under the authority of section 1798 shall be comparable to the rate of interest, charged students.. under the Office of Education's guaranteed student loan program. Because of the limited usage of the education loan program, we believe this program should be abolished. Other financial aid is avail- able. and ~nay be obtained from such sources as the Office of Educa- t~on, Department of Health. Education, and Welf are. These p~'og;r~uus include the Basic Educational Opportunity Grant Program, the Supplemental Educational Opportunity Grant Program, the College- Wprk Study Program, ~nd the student loan programs. We, therefore, pPpO,Se these proposed changes. . . Tt s estim'tted that enactment of this section would result in the i~ how ing `Fdditlon'tl numbers of loans and increased amounts of loans IDollar amounts in millionsi ., ., Increased Additional amount of loans Fiscal year * number i~f loans (in millions) 1977 2 550 $6 7 19~8 2450 65 1979 . 2,300 6.1 198'i 2150 57 198L -- 1,950 5.1 Total 30,1 PAGENO="0351" 2971 23 Additional funding would not be necessary since ade~uate fui~dsa~ë available in the Education Loan Fund. No significant inipact wouidbe anticipated from the reduction in the interest iate for some time since beneficiaries are allowed up to 10 years and 9 months to repay loans following termination of training. Section 503 of the proposal would amend section 1774 of title 38 to add new authority whereby the Administrator may reimburse State ap- proving agencie.s for certain work performed by their subcontractors providing the work has a direct reilationship to the requirements of chapter 34, 35, or 36, and has had prior approva1.~f the Adininistratoi'. This section would also provide an 8-percent increase in the nllo*- ance for administrative expenses payable to State approving agei~cies for work performed by them on behalf of the Veterans' Administi~a- tion. Recent legislative and regulatory amendments have placed au in- creased workload upon the State approving agencies. This has neces- sitated increasing staffs and, where applicable, using independent con- tractors. In view of these factors, we would have no objection to either of these propose.d changes. Enactment of the provision calling for an 8-percent increase in the allowance for State approving agencies would result in the following estimated additional administr'ttive expense Fiscal year: Amount 1977 $135, 000 1978 143, 000 1979 152 000 1980 159,000 1981 166, 000 5-year total 755, 000 Section 504 of the proposal would amend subsection (a) of sectjon 1775 of title 38 to (1) require that the catalog or bulletin of the educa- tiona~l institution be certified by an authorized representative of the school as being true and correct as to content and policy; (2) require that the catalog or bulletin specifically set forth the progress require- ments of the school for graduation; and (3) include as a minimum the information required to be supplied by nonaccredite~d schools under the provisions of section 1776(b) (6) and (7) of title 38. This section would also amend subsection (b) of section 1775 tO ic- quire that the State approving agency, as a condition to approval of an accredited school, must find that the records showing progress of &stu- dent must include, as a minimum (with the exception of attendance). the same information as that required of nonaccredited schools under the provisions of section 1776 (c) (7) of title 38. During the past year, the Veterans' Administration amended its reg- ulations to call for minimum standards of progress. The changes~pro- Posed here would r~quire schools to state these standards in thei~ cata- logs for specific approval by the State approving agency.Theywo~id also require accredited schools to keep records, and. meet certain re- quirements, concerning their standards of progress. It is our view that the proposed changes would aid in curtailing a number of abuses which have occurred in the program. It is believed PAGENO="0352" 2972 24 that some cost savings would result from the enactment of this pro- posal, bitt we have no data on which to base any estimate. Section 505 of the proposal would make three substantive changes in section 1780 (a) of title 38. The first change would bar payment of educational assistance benefits to veterans or dependents for auditing courses. The second would bar payment of educational assistance bene- fits to veterans or dependents for courses for which the grade assigned is not used in computing the requirement's for graduation, including a course from which the student withdraws, unless the Administrator finds there are mitigating circumstances which would permit payment. The third change would bar payment to veterans, wives, or widows, for pursuit of the correspondence portion of a combination corre- spondence-residence course leading to a vocational objective where the correspondence course is completed in less than 6 months. We favor all of the changes proposed in this section of the proposal. We do not believe that a veteran or a dependent should be paid for pursuing courses that are not counted towards such individual's educa- tional or vocational objective. Correspondence benefits are paid for at the rate of 90 percent of the cost of the course without a maximum. The resident portion of a combined correspondence-residence training program, on the other hand,' is paid a't a base rate of $270 ($292. under the rate increase pro- posed in this measure), or cost of course for less than half-time training. It has been determined that, in the case of the majority of these combined courses, there has been front loading of the correspondence portion of the course in that the majci~ity of the cost for the overall combined course is charged for the curi~espondence segment of the course. A relatively brief period of residence training is generally required following the taking of `the correspondence lessons. It .has been found that in many of these combined courses the correspondence' portion of the program, for which the bulk of the charge is made, is of questionable value. We `are of the view that the restriction imposed by this section of the proposal, barring payment for correspondence portions of combined courses where the correspondence portion is completed in less than 6 months~ will he of assistance to us in curtailing the abuses which have occurred in this program. We do not have sufficient data available to us on which to base any cost/savings estimate fo'r this section of the substitute measure. Section 506 of the proposal would make two substantive changes in the notwithstanding clause at the end of subsection (a) of section 1780 of title 38. Clause (A) merely represents a restat~ment of current language which grants the Administrator authority to continue to make benefit payments to veterans and dependents where a school is temporarily closed based upon an Executive order of the President or an emer- gency situation. Clause (B) wou'd add new language to section 1780 to provide for continued payment of educational assistance allowances where a vet- eran or dependent transfers from one' approved educational institution to another educational institution during periods between consecutive PAGENO="0353" 2973 25 school terms. Continued payment would be permitted provided the interval between such enrollments does not exceed 30 days. In a number of cases, veterans or dependents enrolled for two suc- cessive terms at a particular school transfer to another school before the beginning of the second term. Usually they pursue the same. or a similar program, but are denied payment for the break between the end of the enrollment at the first school and the beginning of the next term at the second school because, technically, they are not enrolled at either school during the break period. A student who is enrolled at the same school for both such semesters is paid for the bieak period, except for any calendar months in which no training is scheduled. Since the student. who is transferring between semesters is not~ out of training for any longer l)eriod than the student continuing, in the same school, he is being discriminated against by not receiving, sub-. sistence allowance for that period. Further, since transfers to the new schools are not usually made known to the Veterans' Administration promptly, overpayrnents have been created which result in nonpay- ment periods for the veteran or dependent in the new term when the overpayment is collected. The veteran usually has already spent the money and has no current funds for his training. The proposa.l would end the need for creating an overpayment. against the veteran or dependent for this interim period of time, would eliminate the imposing of hardship on such an individual by' requiring the collection of the `overpayment during a period of time the individual needs funds for education or subsistence, and would eliminate the paper work required for creating and collecting the re- sulting overpayment. We favor this portion of the proposal. We have no data upon which to base a cost estimate. However, we believe the cost of enactment would not be significant. Clause (C) would permit the Administrator to make payments of benefits to eligible veterans and dependents in those cases where the educational institution certifies on an individual semester-by-semester, quarter-by-quarter, or term-by-term basis rather than, for example, a. full school year. This situation occurs in a relatively, small number of cases. The payment would be permitted where the interval between semesters, quarters, or terms does not exceed 1 full calendar month and, provided further, that such absences shall, in the case of courses not leading to a standard college degree, be counted for the purpose of computing the annual 30-day absence limit. We believe that this provision would eliminate a situation which amounts to discrimination against a small number of veterans and dependents who are penalized where the schools certify on. this limited~ basis. We, therefore, favor this change, We have no data upon which to base a cost estimate for this proposal. either, but, again, believe the cost of its enactment would not be significant. , Section 507 would amend section l784(a) qf title 38 to provide that the date of interruption or termination of the pursuitof a program'of education shall be the last date of pursuit or, in the case of corre- spondence training, the last date a lesson was serviced by. the school. This provision represents another move to attempt to~ prevent 78-226 0 - 77 - 23 (Pt.4) PAGENO="0354" 2974 26 abuses of our educational programs. It would place in statutory lan- guage requirements which we have currently imposed in regulatory form. The change would have the effect of setting the specific date beyond which benefits could not be paid to veterans or dependents. We favor this provision of the substitute measure. No data is avail- able on which we can estimate any cost/savings figure. Section 508 of the measure would amend section 1784(b) of title 38 to increase, by $2, the reporting fee payable to educational insti- tutions and joint apprentice training committees for filing reports with the Veterans' Administratioll. The fee is in lieu of any other compensation or reimbursement for reports or certifications such groups are required by law to submit to the Administrator. The reporting fee would be increased from $3 to $5 in the case of most schools and committees and from $4 to $6 in the case of those schools which handle the advance payment checks authorized to be paid under specified conditions. In recent months, the Veterans' Administration has received corn- p~aim~ts from educational institutions throughout the country indi- cating that they were unable to maintain adequate administrative functions concerning veterans and dependents based upon the current payment from the Veterans' Administration. Schools have indicated that the inflationary pressures, additional burdens put upon them with advance payment, standards o,f progress requirements, and the 50 percent employment surveys where applicable, they have had .to increase their administrative staffs. WTe believe that an increase in the reporting fee at this time is warranted. An increase is also consistent with the request of the General Accounting Office that we reevaluate the adequacy of statu- tory school reporting fees as an incentive for timely reporting of training status changes. Enactment of this provision would result in the following esti- mated additional administrative expenses. Fiscal year: Administrative cost 1077 $3, 250, 000 2, 880, 000 2, 585, 000 1080 2, 235, 00(E) 1081 800, 00(E) Total 12, 840, 000 Section 509 would make substantive changes in section 1789 of title 38 respecting the so-called 2-year operation rule requirement. The first substantive change would repeal the exemption from the 2-year rule currently applicable to accredited, nonprofit institutions. The second substantive change would be the addition of two new clauses which would (1) apply the 2-year rule to branches or extensions of public or other tax-supported schools when such branches or extensions are located outside the taxing jurisdiction of the public or other tax-sup- ported school. and (2) apply the 2-year rule to branches or exten- sions of proprietary institutions where such branches or extensions are located beyond the normal commuting distance of the main campus. In recent months, a number of instances have been brought to our attention which represent abuses of our educational programs. Some PAGENO="0355" 2975 27 of. these cases involved contracting between non-profit schools and profit schools or organizations whereby courses designed by the latter are offered by the nonprofit, accredited school on a semester- or quar- ter-hour basis. In others, there are arrangements between nonprofit, accredited schools and outside profit firms whereby the latter, for a percentage of the tuition payment, perform recruiting services pri- marily for the establishing of these branch locations for the school. These recruiting efforts are aimed almost exclusively at veterans. It is our view that the changes proposed by this section of the measure would aid in curtailing the abuses which have turned up, and for that reason we favor them. We believe that some savings would result from enactment of this section of the proposal, but this cannot be computed because of a lack of data. For clarification purposes, we would recommend that on page 43, line 3, after the word "proprietary" the words "profit or proprietary nonprofit" be added. Section 510 of the substitute measure would amend section 1792 of title 38 to insert requirements that the Administrator's advisory com- mittee created by that section of the law shall meet on a regular basis and at least semiannually. We would have no objection to these changes. Section 511 of the proposal would repeal section 1793 and strike the reference to such section from the table of sections at the be- ginning of chapter 36. Section 1793 requires the Veterans' Administration to disapprove tI1.e enrollment of veterans in certain institutions listed by the Attor- ney General as being subversive. The requirement for the main- t'unmg of such a list w'ts abolished two years ago by Executive ordei 11785. Thus, this section of the law is now obsolete, ad we favOr it.s removal from title 38. Section 512 would repeal section 1795 of, title 38. Under this pro- vision of the law, which, has been in existenc.e for a number of years. the aggregate period for which any person may , receive assistance under 2 or more Veterans' Administration educational programs has been limited to a maximum of 48 months. These include benefits received under the World War TI GI bill program, the Korean con- flict. GI bill program, the War Orphans' and Widows' Educational Assistance Act, as well as current programs. For example, if a per- son received 36 months of benefits under the War Orphans' law and subsequently . became entitled to benefits under the GI. bill as an eligible veteran, he or she could receive only 12 months of assistance under the latter program. rFIie stated purpose of the veterans' educational assistance pro- ~1aiii is to restore lost educational opportunities to those. whose careers have been interrupted or impeded by reason of active duty service. and to' aid persons in attaining the educational status to which they might normally have aspired and obtained had they not served their country. Thus, these programs were intended to serve only as a re- adjustment device during the period following the release of the veteran from service to civilian life. The. 36 months of entitlement provided a veteran is generally sufficient to permit him or her to achieve a baccalaureate degree and. PAGENO="0356" 2976 28 when coupled with the additional 12 months' entitlement granted bee inse of eligibility undei more than one progr'trn, sach `in nidi ~idua1 would, we believe, have ample time in which to achie ~e the goal of readjustment to civilian life We, therefore, oppose this provision of the proposal. We have, no data available on which to base a cost estimate on this section of thc measure Sectior~ 513 of the measure would amend section 1796. of title 38, relating to limitatiohs on certain advertising, sales, and enrollment practices of institutions. It would add a new subsection (b) to require that such institutions maintain a complete record of all advertising, sales, or enrollment materials utilized during the preceding 12-month period. Such materials would be required to be made available for inspection by State `tppro~ ing agencies or the Veterans Administration. We would have no objection to enactment of this provision. `We belie~ e it would have the salutary effect of having such in itii `il av~ila.hle for inspection and review. * Section 514 would make a number of gender changes in chapter 36 of title 38, and we favor such changes TITLE VI-VETERANS' EMPLOYMENT ASSISTANCE PRO VISIONS Section 601 of the proposal would amend chapter 41 of title 38, relating to job counseling, training, and placement service for vet- erans, to add a new section 2002A. The new section would create in the Department of Labor a separate agency to be known as the Vet- erans' Employment Service headed by an Assistant Secretary of Labor for Veterans' Employment. The new agency would be responsible, ~ub- ject to the supervision and control of the Secretary of Labor, for car- rying out the policies and purposes of chapter 41. This same section would also amend other provisions of law to insert references to the addition of this Assistant Secretary. Section 602 would make various chances in section 2003 of title 38 relating to the Comprehensive Employment and Training Act pro- grams to promote participation of veterans in such programs. Sections 603, ~304, and 605 would make miscellaneous `changes in sections 2006 and 2007 of title 38. Section 606 would amend section 2012 of title 38 to require the Sec- retary of Labor to include as part of his annual report the number of PAGENO="0357" 2977 29 complaints filed and the action taken on such complaints together with certain other data on contractors. Sections 607, 608, and 609 would make certain gender changes in chapters 41, 42, and 43 of title 38 as well as other minor changes in language. The provisions of this title of the substitute proposal involve pro- grams which are administered by the Department of Labor. For this reason, we would defer to the expertise of that Department for a posi- tion on the changes proposed to be made by this title. TITLE VII-MISCELLANEOTJS AND EFFECTIVE DATE Section 701 would amend section 3101 (a) of title 38 to provide that where the payee of an educational benefit check has designated the address of an attorney-in-fact as the address for check receipt pur- poses and has also executed a power of attorney giving such attorney- in-fact the authority to negotiate the benefit check, such an agreement will be held to be an assignment of the benefit and, as such, would be prohibited. In the administration of our educational programs, we have found many instances of abuse where school officials, their banks or agents have authority to receive and cash a beneficiary's benefit check. These abuses have been especially prevalent in the PREP, correspondence, and flight training programs. Certifications showing the number of correspondence lessons taken by the individual and serviced by the school as well as the number of flight hours logged by the veteran have beeii signed by the veteran in blank in advance and have been com- pleted b~ the `~chool ceitifying, in some cases, lessons never taken or hours never flown. The Veterans' Administration then pays for this training, the veteran or dependent never sees the check, and is unaware of its issimnee or amount. We believe that to continue to permit such situations to occur would be to encourage more fraud and open the door to even more potential abuse of the programs. We, therefore, fully support this provision of the substitute proposal. No data is available on which to base any savings/cost estimate. Section 702. This section states that, unless otherwise provided, the changes made by this Act shall become effective on October 1, 1976. PAGENO="0358" 2978 30 DIRECT BENEFITS-ADMINISTRATIVE COST/SAVINGS ESTIMATES FOR SENA~' A DMEN NO. 2005 TO S. 969, 94TH CONGRESS TABLE A Overall Direct Benefit Cost/Savings: Fiscal . Direct Benefit Cost/Savings ______ (In_millions) 1977 $ 589.2 1978 390.1 1979 . 128.2 1980. . . ~l35.8 1981 -424 8 Five-Year Net Total Cost $ 546 9 I~~i arriving at this overall direct benefit cost/savings estimate, we have considered all of the provisions of the substitute proposal including:. (1) the 8 percent.increase; (2) termination of flight training; (3) 45 months of entitle-V ment for. veterans and dependents; (4) termination of the GI Bill program; (5) the new contributory post-Vietnam era education program; (6) extension of the delimiting date for seriously disabled veterans; and (7) various other changes in title 38, JJnitGd States Code. . PAGENO="0359" 2979 31 TABLE B Overall Administrative Cost/Savings: Fiscal Administrative Cost/Savings Year Manyears (In thousands) 1977 164.8 $ 6,209.8 1978 -9.3 2,904.2 1979 -157.0 627.7 1980 -287.7 -1,505.2 1981 -414.8 -3~,645.1 Five-Year Total -704.0 $ 4,591.4 In arriving at this overall administrative cost/savings estimate, we have considered all of the changes proposed to be made in our educational programs by the substitute proposal. We have also included, in Fiscal Year 1977, the sum of $1,300,000 to represent the cost of redesigning and reprograming necessary for the proposed new chapter. 32. It should be pointed out that it has not been possible to estimate any changes which might be occasioned by the proposals in the measure to tighten up administration of our educational programs. These exceptions are appropriately noted in the accompanying section-by-section analysis. PAGENO="0360" TA~BL~ C SUMMARY OF BENEFIT COST 5.969 ($ in millions) 1977 1978 1979 .1980 1981 8% Rate Increase $349.9 $325.8 $305.6 $286.8 $268.0 9 Month Entitlement Extension 263.2 146.4 57.4 49.8 42.6 Chapter 32 . ... .1 1.4 9.0 27.8 Suspension of Post-Korean CI Bill - 14.6 -71.6 -223.8 -468.3 -750.0 Flight Termination - 11.4 -12.7 - 14.4 - 15.0 - 15.0 Vocational Rehabilitation 1.6 1.6 1.5 1.4 1.3 Tutorial Assistance .5 .5 .5 .5 .5 I\Z) Total Cost $589.2 $390.1 $128.2 -$135.8 -$424.8 PAGENO="0361" TABLE D Summary of Administrative Cost S. 969 (in thousands) 1977 1978 1979 1980 1981 9 Month Entitlement Extension $1,921.3 $1,078.8 $ 420.8 $ 363.9 Chapter 32 6.1 30.0 150.1 $ 311.7 Suspension of Post Korean G.I. Bill -297.5 -1,076.1 -2,407.7 -4,250.6 394.8 Flight Termination -138.9 -157.5 -181.6 -188.2 -6,242.2 Vocational Rehabilitation 12.9 11.8 10.9 -190.1 Tutorial Assistance 7~5 10.5 9.4 Education Loans 19.5 18.1 18.3 15.1 15.3 8% Increase SAA 135.0 143.0 152.0 159.0 Reporting Fee 3,250.0 2,880.0 2,585.0 2,235.0 166.0 DDM Conversion 1,300.0 1,890.0 Total Cost $6,209.8 $2,904.2 $ 627.7' PAGENO="0362" TABLE E 8% Increase of Allowances (Dollars in millions) All Chap ters ~j2jc~~i~ Chapter 34 Chap ter 35 Direct Direct Direct Direct Benefit Benefit Benefit Benefit Fiscal Year Trainees Cost Trainees Cost Trainees Cost Trainees Cost 1977 2,581,300 $ 349.9 28,500 $ 4.7 2,445,100 $ 329.2 107,700 $16.0 1978 2,382,800 325.8 28,300 4.6 2,243,000 304.6 111,500 16.6 1979 2,245,600 305.6 27,900 4.6 2,106,800 284.7 110,900 16.3 1980 2,106,600 286.8 27,500 4.5 1,968,800 266.1 110,300 16.2 1981 1,962,300 268.0 26,900 4.5 1,830,800 247.4 109,600 16.1 Five year total $1,536.1 $22.9 , $1,432.0 $81.2 Th~ 8 percent rate increase reflected by the preceding chart represents an across-the-board increase in all existing educational programs. `No `attempt has been made in this chart to provide for changes made by the substitute proposal. however, in' `computing the overall cost/ savings on the substitute, the 8 percent increase is reflected only as to those programs remaining and would eliminate, for example, any increase in flight training which would be eliminated by section 205. It also does not reflect the termination of the GI Bill program as of December 31, 1976, although this factor is also reflected in the overall cost/savings figure. PAGENO="0363" 2983 35 TABLE F cp~p~er 32 - Post Vietnam G.I. Bill * Title IV (Dollars in millions) * Suspen~ion of Net Saving~ Chapter 32 Post-Korean G.I. Bill Direct Direct Direct Benefit Benefit Benefit Fiscal year Trainees Say gs Trainees Cost Trainees Savi~~ 1977 23,350 $ 14.6 -- $ -- 23,350 $ 14.6 1978 83,480 71.5 150 .1 83,630 71.6 1979 183,040 222.4 2,170 1.4 185,210 223.8 1980 311,450 459.3 11,370 9.0 322,820 468.3 1981 442,690 722.2 30,010 27.8 472,700 750.0 Five year total $1,490.0 $38.3 $1,528.3 Note: These estimates assume passage of all other relevant sections of this bill In arriving at the direct benefit cost estimate for this new chapter, we have made the folLowing assum~tions: * : * a. Ten-percent of servicemen eligible will choose to contribute~ * * b. The average contribution is expected to be $60 per month for an average of 30 months. c. Ten-percent of those who contributed will withdraw their accumulated contributions upon separation from service. d. One-percent of those who remain as eligible will withdraw their remaining accumulated contributions each year. PAGENO="0364" 2984 36 e. The average yearly usage rate is nine months of training. f. Average cost for the first year of separation was assumed to be 1/2 of the yearly rate. 1/2 (9 mc. x $60/mo.) In arriving at the direct benefit cost savings -which would result from termination of the G.I. Bill program, we have made the following assumptiOns: a. For each effective date an estimate of ineligible separations from the armed services by fiscal year is received from Reports and Statistics Service' (042Al). Ineligible strength of in-service personnel is also provided. b. By cohort analysis participation rates from the ~ model" are extended to veteran ineligible separations toestimàte fiscalyear trainee savings. To these figures the budgeted average cost of veteran training is applied:to yield fiscal year savings for veterans. c. The normal participation rate for servicemen is applied to. the average ineligible servicemen strength by fiscal year. The average cost of in-service training-is. multiplied by the estimate of ineligible trainees to yield fiscal year savings for servicemen. a. The totals of items 2 and 3 are added together to get total. trainees andmoneySavitlga. ~ This estimate includes the effects of an 8% rate increase. PAGENO="0365" All Chapters Man- Administrative FT ~ Cost 1977 145.2 $l,92.,300 1978 80.8 1,078,800 1979 31.2 420,800 1980 26.8 363,900 1981 22.7 311,700 Total 306.7 $4,096,500 ~TABLE H Man- Administrative Man- Administrative Cost Cost 141.1 $1,866,800 4.1 $ 54,500 77.4. 1,033,700 3.4 45,100 28.4 383,800 2.8 37,000 24.0 326,600 2.8 37,300 20,0 275,600 2,7 36,100 290.9 $3,886,500 15.8 $210,000 2985 37 ADMINISTRATIVE COSTS Administrative costs are incurred in S. 969 for the following titles and sections. TABLE C Sections 203, 303 - 9-month Entitlement Extension, Chapter 34 and 35. ç~pter 32 - Post-Vietnam G.I. Bill Title IV FT Net Manyears Savings Administrative Savings Chapter Man- ~ 32 Admin, Cost Suspension of Post-Korean G.I. Bill Nan~vears Administrative Savings 1977 (22.6) $(297,500) -0- $ -0- (22.6) $(297,500) 1978 (80.1) (1,070,000) .5 6,100 (80.6) (1,076,100) 1979 (176.4) (2,377,700) 2.2 30,000 (178.6) (2,407,700) 1980 (302.2) (4,100,500) 11.0 150,100 (313.2) (4,250,600) 1981 (425.1) (5,847,400) 28.7 394~80O (453.81 ~(~,242,29~~ `Total (1,006.4) $(l3,693,lOO) 42.4 $581,000 (1,048.8) $(l4,274,lQO) PAGENO="0366" 2986 38 TABLE I Section 205-Termination of Flight Training Administrative FY .Manyears .. Savings 1977 (10.7) $(138,900) 1978 (12.0) (157,500) 1979 (13.7) (181,600) 1980. (14.0) (188,200) . 1981 ~~0J (~90,100) Five year saviflgs (64.4) . $(856.,300) TABLE J .. . . ...... Section 102-Unlimited Extension of Entitlement to Seriously Disabled Veterans in need of Vocational Admi~i~trat.ive FY Manyears Cost * * 1977 :~ .9 $12,900 * 1978 .8 11,800 1979 .7 . 10,900 *~* 1980 * *.. *~... * : io,soo 1981. .6 ... 9,35.5 ~:.~ive.y~ar tQtal 37' $55,455 Section 210-Expansion of Tutorial Assistance Pi~st yeãt admi~iistrative costs would appro~imate and decrease overtime..;: . Blinded and Rehabilitatiou. $7.5 thousánd~ PAGENO="0367" 2987 39 TABLEK Section 502Education Loan Fund Administrative FY Nanyears Cost 1977 1.3 $19,500 1978 1.2 18,100 1979 1.2 18,300 1980 1.0 15,100 1981 1.0 l5~QQ Five year total 5.7 $86,300 PAGENO="0368" 2988 [No. 121] COMMITTEE ON VETERANS' AFFAIRS, U.S. SENATE U.S. DEPARTMENT OF LABOR, OFFICE OF TIlE SECRETARY, TVashin~jton, D.C., July 23, 1976. Hon. VANCE HARTKE, Chairman, Committee on Veterans' Affairs, U.S. Senate, TiTashington, D.C. DEAR MR. CI-IAIR~lAx: This is to inform you of our views on Amend- ment No. 2005, a substitute to S. 969, entitled the Veterans' Education and Employment Assistance Act of 1976, which is presently before your Committee. Among the many am~ndments this proposal would make to the bill, the Department of Labor is particularly concerned with and opposed to that contained in title VI of the ~mendment, which would provide that our Office of Veterans' Employment Services be separated from the Employment and Training Administration and made an inde- pendent administration headed by an Assistant Secretary of Labor for Veterans Employment. Establislunent of a Veterans' Employment Service as a separate agency within the Department would not increase the current high priority accorded veterans. On the contrary, it could impair the pro- vision of services to veterans. The Department administers a number of special programs with respect to veterans and other special groups. Each of these programs is carefully interrelated into the Department's overall effort to provide employment-related services for all special groups, including veterans, women and the handicapped. These special groups have many characteristics in common. The coordination of policies and administration for these special programs not only elimi- nates fiscal and administrative duplication but also results in a more efficient provision of services to the individuals. The fragmentation suggested by this bill would eliminate these advantages without pro- viding other benefits. \~T0 believe that employment services for veterans can best be pro- vided by according them a high priority in the mainstream of activity in the Employment and Training Administration where coordinated policies can be implemented to achieve maximum benefits for each group, rather than isolating them in a separate organizational entity. The Office of Management and Budget has advised that there is no objection to the presentation of this report from the satndpoint of the Administration's program. Sincerely, W. J. USERY, Jr., Secretary of Labor. PAGENO="0369" 2989 [No. 122] COMMITTEE ON VETERANS' AFFAIRS, U.S. SENATE GENERAL COUNSEL OF THE DEPARTMENT OF DEFENSE, July 2~3, 1976, TV as hington., D.C. ITIOfl. \`ANCE }]IARTJiE Oh airman, Committee o~m Veterans' Affairs U.S. Senate, Washington, D.C. DEAR Mn. CIIAiR~1Ax: Reference is made to your letter of July 6, 1976 to the Assistant Secretary of the Army (Manpower and Reserve Affairs) regarding Amendment 2005 to S. 969, 94th Congress. You requested 5 year cost estimates and comment on the amendment's title IV, which is cited as the "Post-Vietnam Era Veterans' Readjustment Assistance Act of 1977." As Mr. Brotzn'ian indicated in his interim reply of July 9, 1976, the views of the military departments have been incorporated in this single Department of Defense report. Title IV would result in about $750 million less in outlays from the effective date of January 1, 1977 through the end of fiscal year 1982, then would be the case in the event of tOtal termination. This would be the result of contributions being deducted from the pay of many par- ticipants while on active duty, but reIative~y few using their post- service benefits during these early years of the new program. In steady state title IV would cost about $300 million per year. This would be at least $1 billion per year less than the current 01 bill, but still $300 million more than `complete termination. Enclosed is a paper summarizing the specific use and cost data you requested. The Department of Defense supports the President's request for total termination of 01 bill educational program for new accessions. A peace-time GI bill is not a cost-effective enlistment incentive. If there is an additional $300 million available for All Volunteer Force' incentives, we would like the option of using it for developing new or ,expanding current enlistment incentives or in recruiting and adver- tising programs. With inservice use precluded, the educational pro- gram proposed in title IV of your amendment would act `as a reenlist- mnent disincentive, since those w-ho would have participated in the sav- ings program would he required to leave active duty to use their benefits. The termination feature of the proposed amendment would provide benefits for those who enlist in the military prior to the effective date of termination, but do not come on continuous active duty until subse- quent to that date. This feature would allow the Services to keep faith with those who have signed contract's under the existing set of in- centives. In summary. the Defense Department supports the termina- 78-226 0 - 77 - 24 (Pt. 4) PAGENO="0370" 2990 2 tion features, but does not support the substitute GI bill, proposed in title IV of your amendment to S. 969. Sincerely, RICHARD A. WILEY. Enc~ osure. USE AND COST DATA TITLE TV-POST \`IETNAM ERA VETERANS' READJUSTMENT ASSISTANCE Ac~ There is no direct experience upon which to make use and cost esti- mates for such a contributory program for post-service educational benefits. The following data represents the estimates of headquarters based on current data available and with only minimal field research on this specific proposal. Table 1 shows the estimated use and outlay cost by fiscal year for fiscal year 1977 (after January 1, 1977) through fiscal year 1982 and for steady state. Table 2 reflects accrual obligations in TOA for the same periods. The use and cost estimates for both tables represent changes from the levels under total termination, and are based on the following assumptions: (1) Participation levels expressed as percentages of accessions after the effective date, as shown in table 3. (2) 1-Talf of the officer participants and half of Army and Marine Corps enlisted participants will be on three year contracts, all others are on four year contracts. (3) Ninety percent of participants will use 75 percent of their benefits within 10 years after discharge. (4) Half of eligibles will begin use within one year after discharge. (5) Remaining 40 percent of eligibles will use benefits evenly over remaining nine years. (6) The contributions of the 10 ercent of eligibles who do not use prdgram and the remaining contributions of those who use only part of their benefits will be refunded 10 years after discharge. (7) .Ten percent of the participants will reenlist deferring use of their benefits. (8) Full-time users will expend nine months of benefit per year. (9 `i Contributors will averacre $750 per year per person. (10) TJsers will expend $1687.50 per year for full-time student or $2.250 per manyear (three times contribution rate). Tables 4, 5, and 6 provide more detail by Service. TABLE 1.-COST AND USE SUMMARY: TITLE V-POST VIETNAM ERA VETERANS' READJUSTMENT ASSISTANCE ACT (COMPARED TO COMPLETE TERMINATION) [Dollar amounts in millions[ ~- Fiscal year- Steady state 1977 1978 1979 1980 1981 1982 Contributors (man-years, thousands) - 35. 9 146. 3 Users (man-years, thousands) 0 0 236. 6 0. 1 279. 7 4.4 294. 0 29.7 294.0 63. 5 294. 0 220. 5 Receipts (outlay) -$26.9 -$109. 7 Payments (outlay) -$177. 4 .2 -$209.8 9.9 -$220. 4 66.8 -$220.4 142.8 -$220.5 1 520.9 Total (outlay) -26.9 -109.7 -177.2 -199.9 -153.6 -77.6 300.4 1 Includes refunds of disenrollees 10 yr after discharge. Vet. Letters No. 122 PAGENO="0371" 2991 3. TABLE 2.-ACCRUAL COST SUMMARY' IN TOA* -. [Dollar amounts in millions[ Fiscal year- Steady 1977 1978 1979 1980 1981 1982 state Projected obligations $36. 7 $149. 5 $241. 8 $285. 8 $300. 4 $300. 4 $300.4. TABLE 3-ASSUMED PARTICIPATION In percent Accessions 36 mo 24 mo 12 mo Totals (thousands) Army 25 10 10 45 160 Navy 5 5 5 15 104 United States Marine Corps 25 10 10 45 43 United States Air Force 25 5 5 35 81 Officer 10 10 10 30 25 ... *.*._.~ .- _... _.~. .. ._. Weighted average 19 8 8 418 TABLE 4.-PARTICIPATION LEVELS COM PARISONS-CONTRIBUT IONS [Man-years in thousandsJ Fiscal year- Steady 1977 1978 1979 1980 1981 1982 state Army 17.5 71.9 116.9 138.8 147.0 147.0 147.0 Navy 4. 5 17. 2 25. 7 29. 2 30. 0 30. 0 30. 0 United States Marine Corps 5.2 21.2 34.2 40.3 42.0 42. 0 42. 0 United States Air Force 6.3 26.7 44.7 54. 1 57. 0 57.0 57.0 Officer 2. 4 9. 3 14. 8 17. 3 18. 0 18. 0 18. 0 Total 35. 9 146. 3 236. 6 279. 7 294. 0 294. 0 294. 0 TABLE 5.-USERS [Man-years in thousandsj Fiscal year- Steady 1977 1978 1979 1980 1981 1982 state Army 0 0.03 0.09 3.2 19. 1 30. 4 110.2 Navy 0 0 0 0 1.3 5.9 22.5 United States Marine Corps 0 .01 .03 .9 4.7 10.4 31.5 United States Air Force 0 0 0 0 2. 5 12. 5 42. 8 Officer 0 0 0 . 3 2. 1 4. 3 13. 5 Total 0 0 . 1 4. 4 29. 7 63. 5 220.5 Vet. Letters No. 122 PAGENO="0372" 2992 4 TABLE 6.-COST COMPARISONS BY. SERVICE-COST COMPARED TO TOTAL TERMI NATION (Dollar amounts in millionsi Fiscal year- 1977 . 1978.. . 1979 1980 1981 1982 Steady state Enlisted: . .. . Army -$13 1 -$53 8 -$87 5 -$97 0 -$67 2 -$41 8 $148 9 Navy -3. 4 -12. 9 -19. 3 -21. 9 -19. 6 -9. 2 30. 4 United States Marine Corps -3.9 -15. 9 -25. 5 -28. 2 -20. 9 -8. 1 42. 2 United States Air Force -4.7 -20. 0 -33. 5 -40. 6 -37. 2 -14. 7 57. 6 Total, enlisted -25. 1 -102. 6 . -165. 8 -187. 7 -144.9 -73. 8 279. 1 Officers -1.8 -7.0 -11. 1 -12. 3 -8. 8 -3. 8 21. 3 Total . -26.9 -109. 6 -176. 9 -200. 0 -153. 7 -77. 6 300.4 Vet. Letters No. 122 PAGENO="0373" 2993 [No. 126] COMMITTEE ON VETERANS' AYFAIRS, U.S. SENATE CONGRESS OF THE UNITED STATES, CONGRESSIONAL BUDGET OFFICE, Wa~shington, D.C., August 4, 1976. Hon. VANCE HARTKE, Chairiman, Committee on Veterams' Affairs, U.S. Senate, Washington, D.C. DEAR MR. CHAIRMAN: Pursuant to section 403 of the Congressional Budget Act of 1974, the Congressional Budget Office has prepared the attached cost estimate for Amendment No. 2005 to S. 969, the Veterans' Education and Employment Assistance Act of 1976. Should the committee so desire, ~ e would be pleased to provide further details on the attached cost estiiiiate. Sincerely, ALICE M. RIvI4IN, Director. Attachment. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE 1. Bill No.: 5. 969. 2. Bill `title: Veterans' Education and Employment Assistance Act of 1976. 3. Purposes of bill: To provide more adequate educational and em- ployment assistance for veterans by increases in: (1) Monthly bene- fits, (2) tutorial assistance, and (3) entitlement extension. This bill initiates a new contributory vesting program for peacetime veterans' educational assistance and phases out the old GI bill and flight train- mg assistance. 4. Cost estimate: [In millions of dollarsj Fiscal year- . 1977 1978 1979 1980 1981 Title I: Budget authorization Outlays Title II: Budget authorization 6. 3 6. 3 349. 7 349. 7 26. 0 26. 0 22. 5 1. 1 -22. 5 87. 0 87. 0 . 3 .3 6. 1 6. 1 374. 9 374. 9 29. 0 29. 0 69. 1 -. 5 -71. 6 79. 9 79. 9 . 3 .3 6. 0 6.0 347. 1 347. 1 28. 8 28. 8 100. 5 -7. 2 -134. 2 74. 7 74. 7 .3 .3 5. 8 5. 8 319. 8 319. 8 28. 5 28. 5 3. 3 -20. 2 -165. 4 69. 7 69. 7 .4 .4 5.6 5.6 290.7 290.7 28.3 28. 3 -204.7 -117. 0 -194. 0 ~ 64.3 64.3 :4 .4 Outlays Title III: Budget authorization Outlays Title IV: Budget authorization Outlays Receipts TitIeV: Budget authorization Outlays Title VI: Budget authorization Outlays Total: Budget authorization Outlays Receipts 491.8 470. 4 -22.5 559.3 489. 7 -71.6 557. 4 449. 7 -134.2 427. 5 404. 0 -165.4 184.6 272. 3 -194.0 PAGENO="0374" 5. Basis for estimate: 2994 2 TITLE I [In millions ofdollarsl Fiscal year- 1977 1978 1979 1980 1981 S. 101: Budget authorization 4. 7 Outlays 4.7 S.102: Budget authorization 1. 6 * Outlays_~ 1.6 This estimate shows the 8 percent incremental increase au- thorized by the bill for disabled veterans under chapter 31 of title 38, U.S.C. It is based on Veterans' Administration (VA) projections of eligible disabled and totally disabled trainees to be, respectively: Trainees in: S. 101 28, 500 28, 300 S. 102 475 450 The average yearly benefit paid to the totally disabled veteran utilizing educational assistance is taken from 1975 actual expenditures of "The Budget of the U.S. Government, fiscal 1977" and adjusted for the September 1, 1974 increase and utilizing it to fiscal years 1977-81. The average yearly benefit of those disabled veterans in S. 101 is strictly for subsistence and is calculated by the VA to be $2,046. It is assumed here and throughout the entire cost estimate that average yearly benefits are not automatically increased and that dependency rates will remain constant at 1.42. TITLE II [In millions of dollarsi S. 201: Budget authorization Outlays S. 203: Budget authorization Outlays- 5. 205: Budget authorization Outlays S. 207: Budget authorization Outlays 5. 210: Budget authorization Outlays 327.7 301.3 281.8 262.8 327.7 301.3 281.8 262.8 111. 1 102. 1 95. 5 89. 1 82. 2 111.1 102.1 95.5 89.1 82.2 -57. 8 -57. 8 -57. 8 -57. 8 -57. 8 -57. 8 -57. 8 -57. 8 -57. 8 -57. 8 -31. 6 -39. 0 -27. 3 -25. 4 -23. 6 -31. 6 -39. 0 -27. 3 -25. 4 -23. 6 .3 .3 .3 .3 .3 .3 .3 .3 .3 .3 4.6 4.6 4.5 4.4 4.6 4.6 4.5 4.4 1.5 1.4 1.3 1.2 1.5 1.4 1.3 1.2 Fiscal year- 1977 1978 1979 1980 1981 27, 900 27, 500 26, 900 425 400 375 Fiscal year- 1977 1978 1979 1980 1981 242. 4 242. 4 Vet. Letters 94-426 PAGENO="0375" 2995 3; Summing the costs of sections 201, 203, 205, 207, and 210 gives us the cost estimate for title II of S. 969. Section 201 consists of the dollars for the 8 percent increase in readjustment benefits for veterans' train- ing in institutions of higher learning or farm cooperatives. The 1975- 76 VA projections for total number of trainees is the following: Fiscal year- 1977 1978 1979 1980 1981 Trainees 2, 737, 000 2, 517, 000 2, 354, 000 2, 195, 000 2, 025, 000 According to VA records, the average. number of months enrolled in school is 7.0 to 7.5; 63.5 percent. of those enrolled are full-time students and 78.5 percent of all trainees are entitled to benefits under section 201. Again, assuming dependency rates constant, average monthly benefits for full- and part-time trainees in college and noncollege programs are then calculated. Section 203 consists of essentially two parts-those in undergradu- ate school who will now go on to graduate studies because of the 9-month extension, and those veterans already in graduate school who will now become eligible for extended benefits. Using various VA publications, we found 23.3 percent and 7.4 percent of veterans in training were enrolled in 4-year degree and graduate degree programs, respectively. An Office of Education survey shows that 25 percent of all under- graduate students go on to graduate school. Although past statistics indicate only 11 percent of all veterans pursuing higher education enter graduate school, it seems reasonable to assume that if benefits were extended, the percentage of veterans in graduate studies would be similar to that of the general student population. As for those vet- erans already in graduate programs, we assume 10 percent would need to take advantage of the extended benefits, although the VA estimates that only 5 percent of all eligible veterans fully utilize their benefits. In order to find a more appropriate percentage utilization number, it is defensible to eliminate junior college enrollments, that is half the elioible veterans, since historical information indicates the majority to terminal degrees. Justification for this can also be made on the grounds that a large number of veterans enrolled in school had 1 to 2 years of college before their discharges. This would enable them to go into graduate studies using their original 36 months of benefits. Since an extremely small percentage go on for advanced graduate degrees, thereby needing extended benefits, it seems reasona~ie that the per- centage utilizing the extension should be small. Finally, total trainees are summed, converted into FTE's and the average 9-month benefit applied to find the total cost for section 203. Section 205 of the bill eliminates the flight training program. The number of trainees is estimated at 44,500 and is assumed to be constant through 1981 as it has remained relatively constant in past years. Be- cause constant dependency and benefit rates are assumed. the average Vet. Letters 94-120 PAGENO="0376" 2996 4 yearly benefit for, flight trainees, $1,300 estimated by the VA, is held constant. The elimination of the flight training program may induce some of the veterans in this program to move into other educational programs. To this extent, cost increases could occur in other sections of this bill. According to an extensive study made by GAO entitled, "Educa- tional Assistance Overpayrnents, a Billion Dollar Problem-A Look at the Causes, Solutions, and Collection Efforts," the elimination of manual verification procedures of the VA could accelerate the process- ing of trainee status changes. in so doing, GAO estimates administra- tive cost savings of $600~000 annually as well as an 11 percent reduc- tion in overpayments. Assuming payments to beneficiaries in chapters 34 and 35 are similarly distributed, the cost savings can be divided proportionately between title II, section 207 and title III, section 307 of this bill. The number receiving tutorial assistance. for section 210 is assumed stable at 11,500 with an average quarterly benefit of $82. TITLE Ill tin millions of dollarsi Fiscal year- 1977 1978 1979 1980 1981 S. 301: Budget authorization 16. 5 16. 4 16. 2 16. 1 16.0 Outlays 16. 5 16.4 16. 2 16. 1 16.0 S.303: Budget authorization 11. 1 11. 0 11. 0 10. 8 10. 8 Outlays 11.1 11.0 11.0 10.8 10.8 S..307: Budget authorization -1. 6 -1. 6 -1. 6 -1. 6 -1. 5 Outlays -1.6 -1.6 -1.6 -1.6 -1.5 This 8 percent incremental increase is based on the 1975-76 VA projections of the number of surviving spouses an~d dependents as Fiscal year- 1977 1978 1979 1980 1981 Surviving spouse 87, 200 87, 200 86, 400 86, 100 85, 700 Dependents 24, 000 23, 500 23, 000 22, 500 22, 000 and the average yearly benefits paid plus the 8 percent requested in- crease in benefits. Explanation for section 307 is the same as stated earlier in section 207. TITLE IV (In millions of dollars( Fiscal year- 1977 1978 1979 1980 1981 S.403: Budget authorization 0 -2. 5 -33.7 -162. 1 -398.7 Outlays 0 -2. 5 -33.7 -162. 1 +398.7 S. 404: Budget authorization 22.5 71. 6 134. 2 165. 4 194. 0 Outlays 1. 1 2. 0 26. 5 141.9 281.7 Receipts -22. 5 -71. 6 -134.2 -165.4 -199. 0 Vet. Letters 94-12~ PAGENO="0377" 2997 Savings from the old GI bill will be realized by the separatees with- out service before January 1, 1917. The projected net separations after this date and the percentage of veterans entering training are ex- tracted from various VA publications. CBO assumed retention rates to be 75 percent, 60 percent, and 45 percent for the first, second, and third years, respectively. Applying the earlier assumptions of con- stant dependency rates, average number of months enrolled in school, and average yearly benefits, the total number of tiainees in this cate- gory is converted into FTE's and a total dollar savings is derived. Under section 404, the total number of veterans eligible for the new contributory vesting educational assistance program is also based on the 1976 projected net separations made by the VA. It is assumed that 10 percent of the enlistee.s will contribute for 12 months; 15 percent for 24 months; 10 percent for 36 months; and the average monthly contribution will be $62.50. Because information is highly speculative, it seems reasonably safe to assume an even distribution and therefore, a mean (average monthly) contribution of $62.50. Also, it is assumed that the veteran will use 9 months of benefits each year after his sepa- ration; therefore, any veteran contributing for 12 months will use 9 months in the first year following separation, 3 months the second year, if contributed for 24 months, 9 months in each of the first 2 years used, and 6 months in the third year, et cetera. A survey by the Department of Defense regarding servicemen's intentions of utilizing the old "free" GI bill, found: (1) 20 percent of the new enlistees planned to use their benefits; (2) After 3 years in the military, 60 percent of them planned to use their benefits; and (3) Approximately 58 percent of the veterans use their GI benefits. Because the new educational assistance program involves a rather high out-of-pocket cost to the new enlistee, it is reasonable to assume something considerably less than the 20 percent who would have used free benefits, would join the program. As information regarding the program date draws near, more servicemen may look toward the fu- ture and enter the program. Especially in light of the rise of junior college opportunity, this may cause an increase in the percent par- ticipating for 24 months. Those enlistees participating in the program for 36 months would need to be highly future-oriented from the out- set and based on the composition of age, marital status and educa- tional background of enlistees, it is assumed that a smaller number would consider this option. Clearly, the participation rate assumptions are highly speculative. The cost for administering this program, as- suming no capital expenditures for a centralized computer center, data storage and maintenance systems, or communications network needed to communicate DOD withholding for participants, is esti- mated at $1.1 million in 1977. Outyear projections are based on CBO economic `assumptions. Vet. Letters 04-120 PAGENO="0378" 2998 6 TITLE V [In tutillions of dollars] . Fiscal year- . 1977 1978 1979 1980 1981 S. 501: Budget authorization Outlays S. 508: 81. 5 81. 5 74. 9 74. 9 70. 0 70. 0 65. 3 65. 3 60. 3 60. 3 4. 0 Budget authorization Outlays 5. 5 5.5 ~ 5. 0 5.0 4. 7 4.7 4. 4 4.4 4.0 The cost estimate for increased benefits for correspondence and on- the-job training programs is based on the same assumptions utilized in estimating title II of this bill. Section 508 calls for an increase in payments to educational institu- tions for each eligible person in lieu of any other compensation for required reports and/or certifications. Several sections (501, 505, 506, 507, 511, and 513) in title V of this bill attempt to tighten controls and strengthen the requirements in the present correspondence and on-the-job training programs. Clearly, thesesections should reduce abuses of VA benefits and, depending on the administrative organization to incorporate these restrictions, cost savings may or may not result. Becanse of the lack of information and uncertainty surrounding the effects of these sections, no cost or cost savings numbers are estimated. TITLE VI [ln millions of dollars] Fiscal year- 1977 1978 1979 1980 1981 S.601: 0.4 Budget authorization Outlays 0. 3 .3 0. 3 .3 0. 3 .3 0. .4 .4 I)ollars designated above are for an Assistant Secretary of Labor for Veterans' Employment, two secretaries, a staff of five, fringe benefits, and expense money to carry out their duties. Expense dollars are estimated to be a percentage of salaries and fringe dollars in line with Labor-Management Services Administration numbers. The dollars are~ inflated for outyears based on CBO estimates. 6. Estimate comparison: Although there are considerable differences in the methodological approaches of CB() and VA, the end results for the 8 percent increase in benefits are virtually the same. The methodology for the 9-month extensions in sections 203 and 303 are markedly different between the two oi~ganizat*ions. A full explanation of CBO's methodology is set forth in section 5 of the cost estimate. The VA assumes 3 percent of tile present trainees and 10 percent of all terminated and/or veterans whose benefits have been Vet. Letters 94-126 PAGENO="0379" 2999 exhausted would benefit from this extension. This second number is then reduced for undergraduate trainees, summed and multiplied by the VA estimate of average cost. There is no argument as to the pro- cedures once the trainee numbers are derived, but the basis for the 3 percent and 10 l?ercent assumption is unclear. CBO estimates the cost savings wider section 205 to be considerably higher than that indicated by the VA. The reason for this is due to the number of trainees affected, which is a much lower projection in the VA estimate. it seems reasonable to assume CJ3O~s interpretation of this section represents a gross cost. savings ignoring the possible substitution effects of those. veterans transferring into other eligible programs, whereas the VA estimate appears to be an estimate of net savings generated by the elimination of the flight training programs. VA dollars for tutorial assistance are marginally higher than CBO estimates due to minor variations in the projected number receiving tutorial assistance and the average yearly support payments. Considerable variance exists in the two cost savings estimates for section 403, the suspension of the old GI bill. CBO methodology for this section is discussed in a preceding section of this cost estimate. CBO expects no (or nominal) cost savings in fiscal year 1977, as the effects of ineligible veteran separations could not be felt immediately. VA methodology starts with the same base number of ineligible vet- erans and applies approximately the same participation rates as CBO, but it does not mention any application of retention rates to the num- bers. This seems to be the only readily apparent reason for the ex- pected higher cost savings generated in the. VA estimates. In order to estimate the costs of section 404 of chapter 32, the VA assumes that 10 peicent of all eligible servicemen will contribute an average of $60 per month for 30 months. It. is further assumed that 10 percent of those would withdraw from the program. The important difference between the CBO and VA estimate is that the VA estimate is at the aggregate level, and in so being, it must make general assumptions regarding overall participation and reten- tion rates. CBO estimates are made for each year of contribution based on individualized yearly assumptions, and then summed to find total trainees and dollars. Also, because dollars will he collected from serv- icemen choosing to contribute in their first year, receipts and there- fore net savings will be realized in fiscal year 1977. 7. Previous CBO estimate: None. 8. Estimate prepared .by: Patricia L. Pacey (225-4972). 9. Estimate approved by: James L. Blum, Assistant Director for Budget Analysis. Vet. Letters 94-120 PAGENO="0380" 3000 [No 127] COMMITTEE ON VETERANS' AFFAIRS, U S SENATE EXECUTIVE OITICE or THE PRESIDLNT, OFFICE OF MANAGEMENT AND BUDGET, Washington, D.C., August 4, 1976. Hon. VANCE H~nTKE, Chairman, Committee on Veteraus' Affairs, U.S. Senate, Washington, D.C. DEAR MR. CHAIRMAN: This letter is in response to your request of July 6, 1976, for the views of this office on Amendment No. 2005 to S. 969, the "Veterans' Education and Employment Assistance Act of 1976." This legislation would, among other things, raise benefit rates under the GI bill by 8 percent; terminate the current GI bill for individuals entering the armed services on or after January 1, 1977; establish a new contributory-matching GI bill education program for the peacetime, All-Volunteer Force entrants after that date.; and extend basic veterans' educational assistance entitlement from 36 to 45 months. The Veterans' Administration and the Departments of Defense and Labor have reported their views on Amendment No. 2005 to your Committee. We concur in the views presented in those reports. Accordingly, with respect to the major provisions, we favor the proposed benefit rate increases, and-in line with the President's recommendation-strongly support the provisions to terminate chap- ter 34 GI bill benefits for future entrants into the peacetime; All- Volunteer Force, with the amendments suggested by the Veterans' Administration. In addition, we concur in the opposition expressed in the reports of the Veterans' Administration and the Department of Defense to the establishment in the VA of an education program for future entrants into a peacetime All-Volunteer Force. We are also opposed to the costly and unwarranted extension of educational bene- fit entitlements beyond the present 36-month period which, as VA noted in its report, is sufficient time to complete an undergraduate degree or vocational program. As VA indicated in its report, the primary purpose of all GI bill education programs has been to help veterans readjust from military to civilian life by helping them get an education they might have gotten had they not served their country in wartime. We would note that the Administration's positions on these and other features of the bill reflect support for those provisions which are consistent with this basic objective, and opposition to those that cannot be justified in terms of the readjustment benefits concept. Given the fact that Fed- eral funds are not unlimited and veterans programs must compete for 57-180 PAGENO="0381" 3001 2 funding with programs designed to meet other national needs, it would seem to ill-serve the Nation's veterans to legislate program- matically unjustified changes in GI bill benefits which are likely to result in substantial uncontrollable expenditures for years to come. In sum, we urge the Committee to act promptly on termination of the Vietnam-era veterans' education program, as recently called for again by the President in his message on unenacted legislation, and recommend that Amendment No. 2005 to S. 969 be amended as sug- gested in the agency reports referred to above. Sincerely, JAMES M. F~r, A&s~istant Dire ctor for Legislative Reference. Vet. Letters 94-127 PAGENO="0382" 3002 [No. 138] COMMITTEE ON VETERANS' A~TAIRS, U.S. SENATE CONGRESS OF THE UNITED STATES, CONGRESSIONAL BUDGET OFFICE, TV ashington, D.C., September 9, 1976. lion. VANCE HARTKE, Chairman, Committee on TTeteran~' Affairs, U.S. Senate, Washington, D.C. DEAR Mn. CHAIRMAN: Pursuant to section 403 of the Congressional Budget Act of 1974, the Congressional Budget Office has prepared the attached revised cost estimate for S. 969, the Veterans' Education and Employment Assistance Act of 1976. Should the Committee so desire, we would be pleased to provide further details on the attached revised cost estimate. Sincerely, ALICE M. RIVLIN, Diiector. Attachment. CONGRESSIONAL BUDGET OFFICE REVISED COST ESTIMATE 1. Bill number: S. 969. 2. Bill title: Veterans' Education and Employment Assistance Act. of 1976. 3. Purposes of bill: To provide more adequate educational and em- ployment assistance for veterans by increases in: (1) Readjustment benefits, (2) tutorial assistance, and (3) entitlement extensions. This bill also initiates a new contributory vesting program for peacetime veterans' educational assistance and phases out the old Cl bill. 4. Cost estimate; [In millions of dollars; fiscal yearsl 1977 1978 1979 1980 Title I- Budget authority Outlays Title Il- Budget authority Outlays Title Ill- Budget authority Outlays Title IV- Budget authority Outlays Receipts Titlo V- Budget authority Outlays Title VI- Budget authority Outlays Total: Budget authority Outlays Receipts 1981 6.3 6.1 6.0 5.8 5.6 6.3 6.1 6.0 58 5.6 376. 5 *344. 5 324. 5 303. 3 282. 1 376. 5 344. 5 324. 5 303. 3 282. .1 26. 0 25. 8 25. 6 25. 3 25. 3 26. 0 25. 8 25. 6 25. 3 25. 3 22. 5 69. 1 100. 5 3. 3 -204. 7 11 -.5 -7.2 -20.2 -117.0 -22. 5 -71. 6 -134. 2 -165. 4 -194. 0 85. 2 78. 9 74. 6 70. 5 66.2 85. 2 78. 9 74. 6 70. 5 66. 2 .3 .3 .3 . .4 .4 .3 .3 .3 .4 .4 516.8 524.7 495.4 455.1 -22.5 -71.6 531.5 408.6 174.9 423. 8 385. 1 262. 6 -134.2 -165.4 -194.0 PAGENO="0383" 5. Basis for estimate: Title 1 3003 2 [In millions of dollars; fiscal yearsj 1977 1978 1979 1980 1981 Sec. 101- Budget authority Outlays Sec. 102- 4. 7 4. 7 4. 6 4. 6 4.6 4. 6 4. 5 4. 5 4. 4 4. 4 Budget authority Outlays 1. 6 1.6 1. 5 1.5 1. 4 1.4 1. 3 1.3 1. 2 1.2 The table above shows the cost estimate for the 8 percent mere- mei~tal increase authorized by this bill for disabled veterans under chapter 31 of title 38, U.S.C. It is based on Veterans' Administration (VA) projections of eligible, disabled and totally disabled trainees to be, respectively: Fiscal year- 1977 1978 1979 1980 1981 Trainees in- Sec. 101 Sec. 102 28, 500 475 28, 300 450 27, 900 425 27, 500 400 26, 900 375 The average yearly benefit paid to the totally disabled veteran utilizing educational assistance is taken from 1975 actual expenditures of "The Budget of the U.S. Government, Fiscal 1977" and adjusted for the September 1, 1974 increase and utilizing it to fiscal years 1977- 81. The average yearly benefit of those. disabled veterans in section 101 is strictly for subsistence and is calculated by the VA to be $2,046. It is assumed here and throughout the entire cost estimate that aver- age yearly benefits are not automatically increased and that depend- ency rates (number of dependents per trainee) will remain constant at 1.2 unless otherwise specified. Title II [In millions of dollars; fiscal years] 1977 1978 1979 1980 1981 Sec..201- Budget authority Outlays Sec. 203- 299. 0 299. 0 274. 4 274. 4 257. 7 257. 7 240. 8 240. 8 223. 9 223. 9 Budget authority Outlays Sec. 205- 108. 6 108. 6 99. 6 99. 6 93. 6 93. 6 87. 4 87. 4 81. 3 81. 3 Budget authority Outlays Sec. 207- . 2 .2 . 2 .2 . 2 .2 . 2 .2 .2 .2 Budget authority Outlays Sec. 210- Budget authority Outlays -31. 6 -31. 6 . 3 .3 -30. 0 -30.0 . 3 .3 -27. 3 -27. 3 . 3 .3 -25.4 -25. 4 . 3 .3 -23.6 -23. 6 . 3 .3 Summing the costs of sections 201, 203, 205, 207, and 210 gives us the cost estimate for title II of S. 969. Section 201 consists of the Vet. Letters 138 PAGENO="0384" 3004 3 dollars for the 8 percent increase in readjustment benefits for veterans' training in institutions of higher learning and farm cooperatives. Based on updated information from the VA, a downward revision in the total number of trainees is reflected in the table below: Fiscal year- 1977 1978 1979 1980 1981 Trainees 2, 547, 500 2, 337, 200 2, 195, 300 2, 051, 500 1, 907, 700 According to VA records, the average number of months enrolled in school is 7.0 to 7.5; 63.5 percent of t.hose enrolled are full-time stu- dents; and 78.5 percent to all trainees are entitled to benefits under see- t.ion 201. Again, assuming dependency rates constant, average monthly benefits for full- and part-time trainees in college and non-college pro- grams are then calculated. Section 203 consists of essentially two parts-those in undergraduate school who will now go on to graduate studies because of the 9-month extension, and those veterans already in graduate school who will now become eligible for extended benefits. Using various VA publications, we found 23.3 percent and 7.4 percent of veterans in training were enrolled in 4-year degree and graduate degree programs, respectively. An Office of Education survey shows that 25 percent of all under- graduate students go on to graduate school. Although past statistics indicate only 11 percent of all veterans pursuing higher education enter graduate school, it seems reasonable to assume that if benefits were extended, the percentage of veterans in graduate studies would be similar to that of the general student population. As for those veter- ans already in graduate programs, we assume 10 percent would need to take advantage of the extended benefits, although the VA' estimates that only 5 percent of all eligible veterans fully utilize their benefits. In order to find a more appropriate percentage utilization number, it is defensible to eliminate junior college enrollments, that is half the eligible veterans, since historical informatioii indicates the majority to be terminal degrees. Justification for this can also be made on the grounds that a large number of veterans enrolled in school had 1 to 2 years of college before their discharges. This would enable them to go into graduate studies using their original 36 months of benefits. `Since an extremely small percentage go on for advanced graduate degrees, thereby needing extended benefits, it seems reasonable that the per- centage utilizing the extension should be small. Finally, total trainees are summed, converted into FTE's, and the average 9-month benefit applied to find the total cost for section 203. Section 205 provides for a study to evaluate the extent to which vocational objective schools are in compliance with placement require- ments for their trainees.The cost estimate for this section is based on a CBO cost estimate of a similar type of study dealing with Disability and Indemnity Compensation. According to an extensive study made liv GAO entitled, "Educa- tional Assistance Overpayments~ a Billion Dollar Problem-A look at the Causes, Solutions, and Collection Efforts", the elimination ~of vet. Letters [38 PAGENO="0385" 3005 4 manual verification procedures of the VA could accelerate the proc- essing of trainee status ch'rnges In so doing, GAO estim'ites adminis trative cost savings of $600,000 annually as: well as an 11 percent reduction in overpayments. Assuming payments to beneficiaries in chapters- 34 and 35 are similarly distributed, the cost savings can be divided proportionately between title II, section 207 and title Ill,- * section 307 of this bill. *The number receiving tutorial assistance for Section 210 is assumed * stable at 11,500 with an average quarterly benefit of $82. Title III [In millions of dollars; fiscal years] 1977 1978 1979 1980 1981 Sec~ 301- Budget authority Outlays Sec. 303- Budget authority Outlays Sec. 307- budget authority Outlays The cost of an 8 percent incremental increase for section 301, surviv- * ing spouses and dependents, is computed in the same manner as earlier sections of this bill and is shown in the above table.. The total number of surviving spouses -and dependents is based on the. 1975-76 VA projections as: Fiscal year- 1977 1978 1979 1980 1981 87, 200 87, 200 86, 400 86, 100 85, 700 24, 000 23, 500 23, 000 22, 500 22, 000 ....__ *.__*_. ~.. *. ~ .. ~ -- .. *_. The cost estimate of section 303, the 9-month extension for graduate work for surviving spouses a-nd dependents, includes both the total dollars for average yearly benefits paid, plus the. 8 percent requested increase in benefits. The explanation for section 307 is the same as stated earlier for section 207. - Title IV [In millions of dollars; fiscal yearsj 1977 197~ - -1979 1980 1981 16.5 16.5 16.4 16.2 16.1 16 0 16. 4 16. 2 16. 1 16: 0 11.1 11.0 11.0 11.1 11.0 11.0 10.8 10.8 10.8 10.8 -1.6 -1.6 -1.6 -1.6 -1.5 -1.6 -1.6 -1.6 -1.6 -1.5 Survivingspouse Dependents Sec. 403- Budget authority -2. 5 -33 7 -162. 1 -398. 7 Outlays -2. 5 -33. 7 -162. 1 -398. 7 Sec. 404- Budget authority 22. 5 71. 6 134. 2 165. 4 194. 0 Outlays 1. 1 2. 0 26. 5 141. 9 281. 7 Receipts -22.5 -71.6 -134.2 -165.4 -194.0 Savings from the old GI -bill will be realized by the separatees with- out service before January 1, 1977. The projected net separations after this date and the percentage of vetera-ns entering training are extracted from- various VA publications. CBO assumed retention rates to be 75 percent, 60 percent, and 45 percent for the first, second, and third years, Vet. Letters 138 - 78-226 0 -77 -25 (Pt.4) PAGENO="0386" 3006 5 respectively. Applying the earlier assumptions of constant dependency rates, average number of months enrolled in school, and average yearly benefits, the total number of trainees in this category is converted into FTE's and a total dollar savings is derived. Under section 404, the total number of veterans eligible for the new contributory vesting educational assistance program is also based on the 1976 projected net separations made by the VA. It is assumed that 10 percent of the enlistees will contribute for 12 months; 15 percent for 24 months; 10 percent for 36 months; and the average monthly con- tribution will be $62.50. Because information is highly speculative, it seems reasonably safe to assume an even distribution and therefore, a mean (average monthly) contribution of $62.50. Also, it is assumed that the veteran will use 9 months of benefits each veer after his separation; therefore, any veteran contributing for 12 months will use 9 months in the first year following separation. ~ months the second year, if contributed for 24 months, 9 months in each ofthe first 2 years used, and 6 months in the third year, etc. A survey by the Department of Defense regarding servicemen's intentions of utilizing the old "free" GI bill, found: (1) 20 percent of the new enlistees planned to use their benefits; (2) After 3 years in the military, 60 percent of them planned to use their benefits; and (3) Approximately 58 percent of the veterans use their *GI benefits. Because the new educational assistance program involves a rather high out-of-pocket cost to the new enlistee, it is reasonable to assume something considerably less than the 20 percent who would have used free benefits, would join the program. As information regarding the program date draws near, more servicemen may look toward the future and enter the program. Especially in light of the rise of junior college opportunity, this may cause an increase in the percent participating for 24 months. Those enlistees participating in the program for 36 months would need to be highly future-oriented from the outset and based on the composition of age, marital status and educational back- pround of enlistees, it is assumed that a smaller number would consider this option Cle'trly, the p'irticip~tion i~te assumptions are highly speculative. The cost for administering this program, assuming:. no capital expenditures for a centralized computer center, data storage and maintenance systems, or communications network needed. to èom- municate DoD withholding for participants, is estimated at $i.1~mil- lion in 1977. Outyear projections are based on CBO. economic assumptions. Title V [In millions of dollars; fiscal yearsl 1977 1978 1979 1980 1981 Sec. 501- Budget authority Outlays Sec. 508- 75. 8 75. 8 69. 6 69. 6 65. 3 65.3 61. I 61. 1 . . .56. 8 . 56. 8 Budget authority Outlays Sec. 512- Budget authority Outlays 5. 1 5. 1 4. 3 4.3 4. 7 4. 7 4. 6 4.6 4. 3 4. 3 5. 0 5.0 . 4. 1 4. 1 . .. 5. 3 .: 5. 3 3. 8 3. 8 . . 5. 6. 5.6 Vet. L otters 138 PAGENO="0387" 3007 6 ~Th~ cost estimate for increased benefits for correspondence and on- ithe-job training programs is based on the same assumptions utilized in estimating title II of this bill, except for the dependency rate. Section 502 increases the ceiling on the loans a veteran can borrow from $600 to $2,000. Should the average loan increase, outlays would increase, but it is estimated that the VA revolving loan fund has suffi- dent resources to accommodate any additional demands for loans. * : Section 508 calls for an increase iii payments to educational insti- tutions for each eligible person in lieu of any other compensation for * required reports and/or certifications. Section 512 authorizes an extensive compliance survey of each insti- *tution offering courses that do not lead to a standard college degree. The VA estimate for this survey was $3.4 million, but only took account of salary and travel dollars. The CBO estimate is higher because it includes an additional 25 percent for operating expenses. Several sections (504, 505, 506, 507, 511, and 513) in title V of this bill attempt to tighten controls and strengtheii the requirements in the present correspondence and on-the-job training programs. Clearly, these sections should reduce abuses of VA benefits and, depending on the administrative organization to incorporate these restrictions, cost savings may or may riot result. Because of the lack of information and uncertainty surrounding the effects of these sections, no cost or cost savings numbers are estimated. Title VI (In millions of dollars Fiscal year- 1977 1978 1979 1980 1981 Sec. 601- Budget authority Outlays 0. 3 .3 0.3 .3 0. 3 .3 0.4 .4 0. 4 .4 Dollars designated above are for an Assistant Secretary of Labor for Veterans' Employment, two secretaries, a staff of five, fringe bene- fits, and expense money to carry out their duties. Expense dollars are estimated to be a percentage of salaries and fringe dollars in line with Labor-Management Services Administration numbers. The dollars are inflated for outyears based on CBO estimates. 6. Estimate comparison: Although there are considerable differences in the methodological approaches of CBO and the VA, the end results for the eight percent increase in benefits are virtually the same. The methodology for the 9-month extensions in sections 203 and 303 are markedly different between the two organizations. A full explana- tion of CBO's methodology is set forth in section 5 of the cost estimate. The VA assumes 3 percent of the present trainees and 10 percent of all terminated and/or veterans whose beirefits have been exhausted would benefit from this extension. This second number is then reduced for undergraduate trainees, summed and multiplied by the VA esti- mate of average cost. There is no argument as to the procedures once the trainee numbers are derived, but the basis for the 3 percent and 10 percent assumption is unclear. Vet. Letters 138 PAGENO="0388" 3008 VA dollars for tutorial assistance are marginally higher than.- CBO estimates due to minor variations in the projected number receiving tutorial assistance and the average yearly support payments. Considerable variance exists in the two cost savings estimnatesfor section 403, the suspension of the old GI bill. CBO mnethodologyfor this section is discussed in a preceding section of this cost estimate. CBO expects no (or nominal) cost savings in fiscal year 1977, as the effects of ineligible veteran separations could not be felt immediately. VA methodology starts with the same base number of ineligible vet- erans and applies approximately the same participation rates as CBO, but it does not mention any application of retention rates to the nuni- bers. This seems to be the only readily apparent reason for the expected higher cost savings generated in the VA estimates. In order to estimate the costs of section 404 of chapter 32, the- VA assumes that 10 percent of all eligible servicemen will contribute an average of $60 per month for 30 months. It is further assumed that 10 percent of those would withdraw from the program. The important difference between the CBO and VA estimates is that the VA estimate is at the aggregate leveL and in so being, it must make general assumptions regarding overall participation and reten- tion rates. CBO estimates are made for each year of contribution based on individualized yearly assumptions, and then summed to find total trainees and dollars. Also~ because dollars will be collected from servicemen choosing to contribute in their first year, receipts and there- fore net savings will i)e realized in fiscal year 1977. 7. Previous CBO estimate: On August 4, 1976, a CBO cost estimate was prepared of an earlier version of S. 969. 8. Estimate prepared by: Patricia IL. Pacey. 9. Estimate approved by: JAMES L. BLUM, Assistant Director for Budget Analysis. PAGENO="0389" 3009 WALTER F. MONDALE MINNESOTA `~J(nffe~ ~iatez ~~enate WASHINGTON. D.C. 20510 July 1, 1976 The Honorable Vance Hartke Chairman Senate Committee on Veterans' Affairs 414 Russell Senate Office Building Washington, DC 20510 Dear Vance: As the Committee on Veterans' Affairs considers legis- lation during the next few weeks to make improvements in the system of educational benefits available under the GI Bill, I hope you will include in your committee bill an extension of entitlement from 36 months to 45 months for students enrolled in "farm cooperative" programs. Farm management is an increasingly sophisticated and complex field of training, and many young veteran farmers find that in 36 months of training they cannot learn enough to manage successfully a modern agricultural enterprise. Today's young farmer must learn such diverse subjects as financial management, commodity marketing, agronomy, ferti- lizer and chemical use, tax management, and a host of others. It is simply impossible to learn all this material well in just three years. A study of adult farm management training conducted by scholars at the University of Minnesota Institute of Agricul- ture has shown that a longer period of training is needed. The evidence shows that a farmer studying management techni- ques can increase his earnings slightly at the very beginning of a training program by applying technological improvements. The student-farmer's earnings then typically level off or evc~n dor31~rn uLlcjht]y f'nr two or three years while the 1rus~inge- rnunt of tJ~ti farm enterpriue is reorganized and improved, Finally, earnings turn upward and climb substantially during the fifth and sixth years as the reorganized farm is managed according to principles taught in the program. No young veteran faces more difficulty in readjustmont to civilian economic life than the one who is trying to make it as an independent family farmer. Additional educatic~r~til benefits could help him a great deal. I hope the Coinmit:tee will seriously consider this need and provide for the increased entitlement in its bill. PAGENO="0390" 3010 With warmest personal regards. Sincere dale cc: Members of the Senate Committee on Veterans' Affairs PAGENO="0391" 3011 DIVISION OF AGRICULTURAL EDUCATION 130 Classroom-Office Building University of Minnesota St. Paul, Minnesota 55108 AN ADULT * ~DUCAT~O~AL PROGflAM Reprinted April 1975 PAGENO="0392" 3012 IMVES1~N~S ili EDUCATION FOR FARMERS Summary of an Economic Study of the Investment Effects of Education in Agriculture Edgar A~ Persons Gordon I. S~an.son Reward H. Kittleeón Gary W. Luke The University of Minnesota St. Paul, Minnesota January 1968 Reprinted -. September 1970 Research Report Project No. 427-65 Contract No. 6-65-09]. The research reported herein was performed pursuant to a con- tract with the Office of Education, US. Department of flealtb, Education, and Welfare. Contract:ore undertaking such projects under Government sponsorship are encouraged to express freely their professional judgment in the conduct of the project. Points of view or opinions stated do not, therefore, necessar ily represent official Office of Education position or policy. U.S * DEPARTI4ENT OF HEALTE, EDUCATION, ~N1) WEL1DARE Office of Education Bureau of Research PAGENO="0393" 3013 I TABLE OF CONTENTS LIST OF TABLES, LIST OF FIGURES * ill AcKNOWLEDG~{ENTS iv FORE~iORD HIG}{ 1.IGI~TS OF TEE REPORT vi INTRODUCTION 1 STUDY OF ECONOMIC RETURNS TO INVES~1ENTS IN EDUCATION . * . . 3 RESULTS OF OThER STUDIES OF RETURNS TO ADULT EDUCATION. . * . 5 INTERPRETING TEE EVALUATION OF IRE FARM M AC-EMENT PROGRAM. * 7 EXPECTED RETURNS TO INSTRUCTION 7 LABOR EARNINGS 8 RETURN TO CAPITAL J~N1) FAMILY LABOR 11 TOTAL FARM SAlES 14 DECISION TO PARTICIPATE 14 BENEFIT-COST DETERMINATIONS B)R FARM OPERATORS 14 COSTS TO TEE FARMER 18 ThE FARMER'S BENEFIT-COST RATIO 20 DETERMINING BENEFIT-COST RATIOS FOR TEE COMMUNITY 20 CONCLUSIONS AND IMPLICATiONS 25 PAGENO="0394" 3014 ii LIST OF TABLES Table Page ~. Means and Indicies o Farm Records Analyzed in 1965 2. Esans and Indivies of Farm Records Analyzed in 1962 5 3. Discounted Benefits of Education to Farm Families Enrolled in "well-Organized" Farm Business Management Education Programs Based Upon Labor Earnings Adjusted for Taxes . 17 4. Discounted Coats of Farmers Enrolled in `Well- Organized" Farm Management Education Programs. , . . 19 5. Community Benefits from Farm Business Management Education Program for Fifty-One FamilIes 21 6. Annual Community School Operating Coats for a Farm Management Program Etr~loying One Full- Time Adult Instructor 23 7. Capital Outlay for Farm Business Management Program 24 8. Marginal Paris Sales Associated siith Enrollment in Farm Business Nanageiasnr Education 25 PAGENO="0395" 3015 1-ti LIST OF FIGURES Figure Page 1. Relationship Between Mean Labor EarnIngs end Adult Farm Business Management Education * 9 2. Relationship Between Indexed Mean Labor Earnings and Adult Farm Business Management Education 10 3. Relationship Between Mean Return to Capital and Family Labor and Adult Farm Businesa Management Education 12 4. Relationship Between Indexed Mean Return to Capital end Family Labor and Adult Farm Zusines~ Management Educati~ 13 5. Relationship Between Mean Total Farm Sales and Adult Farm Management Education 15 6. Relationship Between Indexed Mean Total Farm Sales and Adult Farm Management Education 16 PAGENO="0396" 3016 iv ~C~ZOWLEDGEh~(TS "f~leentB IXL Education for ~ is a susuary of ~`M EconomIc Study of the Investment Effects of Education In ~griculturn" prepared by the Agricultural Education Department, College of Education, University of Minnesota, 55 the fiu.al report of USQE Re-eeerch Project 427~65. The euthota erpreae appreciation to the Department of Agricultural Economics of the University of Minnesota and to the vocationai-agriculture farm business record analyole canCers of eba area voestIomal~-tethaical schools for permitting access to the farm business record, analyses upon uhich the study is based. PAGENO="0397" 3017 FOREWORD This study is one in a series of pioieering efforts to determine more precisely the outcomea of educ.stion. Mere spacifically, it is en effort to describe the relacioz~ahips between educational inputs tud economic outcomes. while the study i~ highly specific with reference to an adult education progr~n iii agriculture, it has relevacca to the total field of educatfo~, It has special significance at this time when the ~ ratios in educational endeavor are being raised for e~'uuuinacioa. Itt a way this study is a ttnacurel" since it utili~ea a source of data mot heretofore available for researchers in agricu.ltural education, The authors of this report are to be comeended for the new knowledge they have added to the field. Its always, when one question is answered, several more spring up. In this frame of reference, this etudy might well lay a claim to having a part in the knowledga ex~'losion about which so much is said these days. In say event, the results of this pLace of rneearch deserve the vary special attention of all those responsible for conducting, planning, super~~ vising and administering educational prograir~, particularly in the field of vocatjonsl..technjcai education. S Milo 3. Peterson, Chairmen Departeant of Agricultural Education University of Minnesota PAGENO="0398" 3018 vi iiic~ LIC~{TS 0? T!{F~ ItF~PORT This reseerdi in4 thy i~vmstigated the degree to which ati educational invasttmatLt is worthwhile for farmers in pursuit of individual and family goals and to the community in which such education. is conducted~ It craw- med the ralatioushipa among costa, benefits, and tb~ time scale over which costs wculcl be incurred and benefits ctndve4. The educational investatat was represented by am instructional program iii farm b Incas and ramourca ,~aruagcntnt. BeneFits were messed by eraninirtg. 3,518 business records of fareerS who were e-nrolled in farm business m~.isagemeat education in. vocational.' agriculture departments of Mianesota public ~chool~ from 1959-1965. This mn.~uizy was asvng the first, if not the first, to include a celcu' lation. of btnefiC-cost enalysia of education. for self-~mpi~yed adults. A brief listing of its conclusions and inpitcationa follows: I. In. a benefit-cost analysis is which all direct end opportunity costs are calculated, and where all future, benefits are. dis' counted to present value, a farmer can expect to realize about four dollars of labor earnings for each dollar of investment in the educational programs described in this iru~dry. This benefit-coat ratio of 4:1 does not include benefIts or return.5 which are non-monetary. 2. In a benefit-cost analysis in which the benefits to the community are calculated as the aggregate rise in fermi labor. earnings at~4 where the costs include the aggregate co&ta borne by the community, the beef~t~cost ratio is appro-4mately 2:1, This is sri excessively consarrativa estimate since it does not Include as ben.efits the Increase in buniness activity which derives from expanded fare smlt~, mipt- doe-s it include a cotrnumity benefit which derives from en expanding tax base. A benefit-cost ratio which iecludcs fnrm sales as a measure of business activity is 9:1. tnclu~ion. of neasurca of Increased tax base or other less tangible monetary benefits result in en even greater benefit-cost ratio. 3. M important aspect of the study was a determination of whether the educational., investment demonstrated the economic ~ of a diminIshing marginal return effect over a given time scale. A time scala of eight years, the arbitrary period over which all benefit-cost ratios were calculated, wss used. In the first three years of management Instruction, theta were rapid gains iii fare income which derived from the adaptation of modern technology. Diminishing marginal returns occurred as farmers reached practical ceilings to their capacity to employ technological improvements on existing enterprise combinations. During the fourth and fifth years of instruction, farmers reorganized and reallocated their productive resources to revised enterprise combinations. Prom the sixth to. the eight year of Instruction, farm income increased PAGENO="0399" 301,9 vii sharply and dramatically and continued to rise at a steady rate in the remaining two years reported in this study. The conclu- sions and inpUc~tions from this information are that diratnishlog isarginal return effects are observable in educational investments but chat these effects ma~aj~nam~le. 4. With an instruction program in which the benefit-coat ratio is higher than 1, the plotted curve of marginal returns becomes, in effect, an expression of the psychological phenomenon ~ciowa as the learning curve. The response to education curve acceler- ates rapidly, declines to a plateau and again rises sharply as continued educational investments are made. The response curves may be manageable since they depend upon the vax-fables which affect the learning situation. Increasing the intensity of the initial three yearn of instruction and providing similar instruc- tion in the years which follow may increase the initial response to educational investment and reduce the time span during which declines in response nay occur. 5. This study, as with all similar inquiries involving benefit-cost analysis, sought to answer the following questions: Does it pay? For whom? Under what conditions? The results indicate that no agricultural community can afford to be without an educational input that will yield as high a return on the Investment as is demonstrated in this analysis. As shown in Items 1 and 2 above, the return is high to both the individual participant, and to the consaunicy. But the conditions are rigorous; the return is based upon a highly-structured educational program. The educational program must be goal directed and the enrolled partic- ipants must have a high degree of `goals consciousness." This study was rigorous in its definition of a "eell-organjged"* educationel prog ran. * See page 7 for the definition of "well-organized," PAGENO="0400" 3020 INVESTIIENTS IN EWCATIOt~ FOR FARI{ERS lotroduction Agriculture has provided a superior mode]. to illustrate the value of research, the consequences of technological ftmovatiott~ and the drama of accelerating output per worker. Agriculture in the aggregate, however, contains elements of an economic paradox. The industry has grcwn rapidly while individual farmers have not shared proportionately in the industry's growing wealth. Farm operators have been quick to respond to the apparent needs of the iadus try by making sharp adjustments in the deployment of their resources. Operators now on fares are witnessing a marked increase in the substItutions between physical ~d human input8.. Th~ proportion of total resource input which is allotted to the broad categories of land, labor, and capital is also changing. As the quantity of available land becomes fixed and competi- tion from off-farm employment reduces the available labor sources, capital is deployed more freely as a substitute for the other two resources in scarce supply. Substitution of larger amounts of capital clearly increases the problems of capital management, but it does not make the management of land and labor any less important to the successful operation of the farm business. To depend wholly upon the adaptation of now technological processes or substitutes for human labor to improve the farm operator's economic plight~. ignores the contribution to income that may be made by management. Each major decisiom that the farm operator makes has an economic consequence. The value of technology and mechaniration to the farm business is limited by the ability of the farm operator to choose the alternative courses of action beat suited to his unique resource combinations. Adaptation of a particular set of packaged technology that has proven highly profitable for one farmer may result in minimum or even negative gains when selected by another farmerwhoae profile of resource allocation is appreciably different. The decision-tanking process generally follows a pattern of (a) examining the current situation, (b) setting goals for family and farm, (c) examining the alternative decisions or plans that may lead toward accomplishment of goals, (d) choosing among the alternatives, (e) implementing the decision, and (f) evaluating the outcomes of the decision. Coping with the complex-. ities of modern farm businesses requires that farm operators be well trained in this decision-making process. Further, it demands that they understand the economic consequences of their decisiOns. Emphasis on Improved farm management ability is neither ems to agricul- ture nor innovative In vocational education. Since the dacision-making process begins with en assessment of the current situation, programs that were designed to develop historical data ott the farm business can be thought of as early efforts in farm management education. Itt Mirmneaota, the initial offort was made by the Department of Agricultural Economics. while inItially the collection of farm business data was not primarily aimed at helping the individual farm operator in selecting alternatives for management decisions, PAGENO="0401" 3021 2 the potential use of the farmer's own business record for that purpose soon became evident.' Beginning several decades ago, a farm business record sussiarization process was deimloped by the Department of Agricultural Economics at the University of Minnesota. It provided the farm cooperator with summary data that could be used to exairttrte his current business situation as preparation for pending management decisions and as a means for evaluating previously ispleirsnted decisions. The usefulness of this management tool was recognized by farmers and instructors in the lustituticetal-on-parm Training Programs conducted under PL 894, Pt. 550, PL 16, and Pt. 346 following World War II and the Korean conflict. Studies were made by the Department of Agricultural Education at the University of Minnesota to test the feasibility of using the business managessint emphasis in adult farmer education in the public school program of vocational agriculture. Encouraging results from these early studies coupledwith the successful implementation of a number of pilot programs led to a widespread adaptation of a curriculum emphasis employing a farm management-business analysis orientation. Adaptation of electronic computer technology to the farm business record summary improved the usefulness of the farta record as a management guide by speeding the record `analysis procedure. Some pilot studies have also been made to determine the usefulness of various patterns of combining individual records for compilIng data that may have application to specific types of farms (i.e., dairy farms, cattle feeder operations, ceshcrop fares, etc.). Wor~c is now underway to improve end ezpeud the analysis system so that it can be more effectively used as a teaching and management tool. Currently, there are about sixty-five public high schoois itt t4inaa- sota that employ special instructors for farm business management for farm operators, In addition, many other schools provide adult farm manage- meat insttuctlcn as an integral part of the total vocatioual-sg,~iculture program. A typical pattern of operation for a school with one full-time adult instructor includes forty to sixty farmers enrolled in farm management education courses plus additional offerings emphasizing mechanized agriculture or farm production enterprises. The farm management program consists of at least three and usually four distinct and separate classes. The courses are commonly titled "Farm Records and Accounts," `Farm Business Analysis," "Fare Organization," and "Advanced Fans Martageusittt." While course content may vary somewhat from school to' school, the usual program will meet the following criteria: 1. There are regularly enrolled students in each course. 2. The course follows a systematic course of study with specific units taught as a pert of each course. 3. The three (or four) year course follows a planned Curricular pattern. 4. There should be continuity between courses with progression toward fans business reorgani zation, increased operating efficiency or other objectives which may be consistent with farm family goals. 78.226 0 - 77 -26 (Pt.4) PAGENO="0402" 3022 3 5. On-farm instruction is an integral and systematically.. organized part of the instructional program. Individualized cia-farms instruction is an eseential elenment of gm~ effective program. Successful teachers generally consider it necessary to meet with the farm family six or more tines during the year in order to provide continuity of instruction and atdngful adaptation of class-- room materials to unique farm situatiorns~ An ideal situation provides monthly on-farm instructional vIsits to farm families in their first year in the program; for second, third sad subsequent years of enrollment, on-- farm instruction may be slightly reduced. Frequency of visitation will depend upon the needs of the individual farm family. Many farms operators will demand more) rather than least on-farm instruction as they make prog-' ress in the programs. Stuc~y o~ EcooRatu~sv2~iI~ducati~t It was within the framework of the farm business management education programs conducted by the public schools through vocational-agriculture departments that the question of the precise returns to imnvestmenX in educa- tion for farmers was first examined. The decision to implement a program of farm business immamagemnsat education through the vocational-agriculture department of a public school should emerge from consideration of the probabla tangible and intangible returns that will accrue to the individuals enrolled end also to the community which providee. the setting as well as funds for program support. When estimates of the~. returns to these public end private sectors have been made, they must then be compared to the returns from alternative educAtional investments. The alternatives which offer the greatest return in tangible and initangibla bene- fits should be given the highest priority in the allocation of educational resources. Few educational programs provide a basis for determining the tangible benefits of Instruction. Farm business nesagamant education is a unique example. Enrollment le contingent upon agreesmeut by the farm family to keep eta accurate and complete farm business record. Returns to education for those contemplating enrollment in a farm business management education pro- gram are roughly predictable from an examination of the, recorded evidence of returns to recently-enrolled cooperators in the educational program. Exexrtnxtioma of returns Co farm business management education provides an evaluation of the following questions: l~ What return can a farm operator expect Irons enrollment in a farms business management program in the. local high school? 2. Does the return diminish with succeeding increments of instruction so chat continuing itwastmnermt in education for an individual reaches a point where it is no longer profitable? 3. Does the total benefit to the coammmunity exceed the community costs of program ireplerenratiomt and support? PAGENO="0403" 3023 4 To provide answers to these questions, researchers turned to the records of those who bad been enrolled in vocatione1-~agricu1ture farm buainesa management education programs since 1959. Extreme care was taken to insure that the confidential nature of the record was not violated. Code numbers, rather than names, were assigned to all records to protect. the identity of the Lrtd.ividual farm record during the analysis of data. A total of 3,518 records were examined. tiny study of economic return is hampered by fluctuations that occur in price levels and general economic activity. Economic growth or change is frequently measured in terms of "constant dollars," a term that denotes a unit of buying power rather than monetary denomination. The techniques for computing the "constant dollar" nay vary. In this study the effects of price level variations end other economic factors were minimized by calculating index values for the measures of eco~ nozsic returns. The average financial success of farm operators whose farm records were analyzed for the. first aims in a particular year wee arbitrarily essigmed an iüd~x value of 100. Within the sass year, the average success of farm operators whose records were analyzed for the second, third, or oub~e' cjuent year was assigned an index, value relative to the performance of the group whose records were analyzed for the first time, This technique is illustrated in Table 1 for the labor earnings repcerte4 in records analyzed in 1965. Table 1. MEtiNS tiND INDICES OF EARN RECORDS ANALYZED IN 1965. Years Analyzed ~ ---.~---.--------------------.------------- Mean Labor Earnings $4,026 $5,429 $6,501 $5,3Z6 $6,110 labor Earnings Index 100 135 161 132 153 , ~ ,.. ~ The example shows that the labor earnings of those whose records ware analyzed for the second year were 135 per cent of those analyzed the first year. In periods of adverse prices or weather or adverse changes in the business cycle., there nisy have been low, earnings in the initial analysis year. The 1962 analysis year is presented in Table 2 as en. example. An. increese in labor earnings of $865 for farmers in the third analysis year results in an index of 130, while in 1965 (See Table 1), it required en increase of $1,200 to produce a similar index. Thus, the index system of examining the succee9 of the farm busine~a for a particular year is a reason- ably accurate assessment of the financial success of farm operetors with different farm record histories relative to thøse with no effective fore management instructfo~. The effects of some of tire fectors over which an operator has rio control, but which cerise wide variation in a farm operator's PAGENO="0404" 3024 5 income from year to year, have been nullified in the computation of an fr~dex. Thus, the effect of farm business management ins erection may be presented more objectively. Table 2. Mt&NS AND iNDICES OPPAINi EECQRD~ ANALYZED iN 1962,' 1 2 X!~-4~3~9~ 3 lyced 4 5 Mean Labor Earnings $2,903 $3,236 $3,768 $3,769 $3,009 Labo r &mrn.iugs Index 100 111 130 130 104 Results of Other Studies of Returns to Adult Education Dr. John Rolloff, a former ?thmosota vocational-agriculture instructor, developed and tested a model for determining the influence of the farm busi.' mesa analysis phase of inatrucUon in farm managaxnsnt upon factotn1of economic efficiency and understanding of economic principles of management. Es used McCozraiclc'e east of basic profit mrs nxtzing principles as one measure of educational output.2 To tietezuies the measures of economic effi" ciency, Rolloff used two criteria: Cl) the variables regularly used as measures of farm busine~e management efficiency, sad (2) the variables which mere judged significant by experts.3. The selected variables mere gross income, net cash income, net farm income, net worth, net wsrg~n, operating ratio, overhead ratio, gross income per $1,000 invested, net farm income per $1,000 invested, gross incorse.per men equIvalent, and productive man work units per stan equivolerit. John A. "The Development of a Modal Design to Assess instruction in Terms of Economic Returns. end the Understanding of Eco- nomic Principles." Unpublished Ph.D. dissertation, The Ohio State University, Columbus, 1966. ~`McCcruiick, Floyd 0. "Developing a Procedure for EvaluatIng Farm Understanding of Basic Profit MAximizing Principles." Ph.D. dissertation, The Ohio State University, 1964. 3Roiloff, "The Development of a Model Design to..." p. 43. PAGENO="0405" 3025 6 Using the first-year farm record as a base, measurements of changes ir~ economic efficiency from year to year were niadm The procedure assumed that the first year of instruction did not contribute to the managerial efficiency. Measures of earnings iii th~ second year were adjusted for changes in economic and weather conditions by a correction factor based upon data from the Economic Research Service of the United States Depart-. meat of Agriculture. Rolloff used three criteria to select educational input variables: the inputs were regularly computed by teachers of vocational agriculture for state reports, the inputs wars judged by Oxparts as potent variables, and the inputs logically could be assigned a atandarized monetary value per unit. The local vocational-agriculture instructors ware asked to report the contact hours (class time, farm rnanagenent consultation at the school and on-farm Instruction time). Through a time ascessnant procedure, he found the number of instructional hours and assigned a charge of $5 per unit based on reimbursement rates for vocational education itt Ohio. Rolloff concluded by presenting a positive mean dollar ratio of 1 to 52.16 between the 1965 costs of instruction and change in farm inconie between 1964 and 1965. The mode). Rolloff presented was a contribution to the analysis of individual economic returns from instruction in farm business management. Because of the limits of hia cost calculations, however, the significance of the results for individual or community decision making was rather limited. Crancara investigated the direccio~ and degree to which measures of (aria production responded to educational inveetmenta In Minnesota.4 }te. studied two groups of farmers. Members of group A were enrolled In the Mirmesota adult farm management education program In 1960, 1961, arid 1962; those in group B received farm management instruction only during 1962. Thirty-three fern pairs were obtained by matching farms in group A with farms In group B on the basis of 1962 data: farm size (measured im work units), the combination of livestock sad crop enterprises, and soil, cheats, end topographical factors. By comparing input costs of farm manigeaertt instruction to the value of the output as measured by the average increases in cash income for group A versus group B Ia 1960 and 1961, Cvancara was able to determine the ecouoinic returns to investmang In educatIon. Group A farms Increased their income $558.89 over group B farmers. Re projected these returns by taking 50 fare units times $558.89 yielding $27,944.50 as the Increase in cash income due to fans msaageaent Instrucriorz by arts full-time vocational- agriculture instructor. 4Cvancara, Joseph C. "Input-Output Relationships Among Selected lntellectnal Inveetmerits in Agriculture." Ph.D. The-sie, University of Minnesota, Minneapolis, 1964. PAGENO="0406" 3026 7 CvanCCta studied the direction and relative magnitude of the cash- inco~irLcre5Se vantages of Broup A. Group A bad an iricreaae o~ $i,179 (1961 vs. 1960) compared to a group B increase of $403 per terra unit. ~y extendiog the procedure to 1962 vs. 1961 data, he showed that group A L~cia~ted $927 compared to $1,629 for groui~ B. Ee concluded thst group B fares had the potential of increasing faze intone end raised the quas~ion as to whether inc.reaate in fern income attributed to. fame bu-sineos ecu-age- treat inatroction might be aubjeet to the dimisi.mhfl'S returns effect. Because the mature of the. educational input vaa~tac1 from. stho~1 to school, there was a aced to d.isUrxguimh programs which ware, expected to provida more iu-ttu-sIv~ educational inputs. These. schoo1~ were designated as "well-organized" programs after ametiag the following eziteriat 1. The classes were taught by full-time instructors who hod reapoes thi ii ty only for the adult program. 2. The programs were judged excellent by a panel of experts who corraicbsred two primary measures: a. The classes were orieu-tmd toward farm business masagersant topics. b, The classes had a high degree of continuity. Statistical procedures in the study report a measure of the accurocy of each analysis end, therefore, &rsdicete the.do~rtC of ccatfidau-ce leadia~ to generellzatiou-5 or coaclusiofla from the date. One common indicator, RZ, is called the coafficteot of detemaizretiott. This measure describes the proportion of the variation In one variable that is accountable to variatipU in ether variables. For example, if the R2 value of the. relationship betw~~n labor earainge end cumulative years of instruction was .50, case half of the variation In labor eamminge can be accounted for by verlatioc io cumulative years of iu-structIo~, If the `ieritbl~~ used For prediction of income account- ed for all the variability in labor earatu-ga, the f~ would have a value of 1.00. of the R2 values in this study ware in the range of .20 to .80. paccod~~~2~ lsat~t~~on `%TeIl-orgarstzed" programs of farm business marragcattttt instruction repreSent intensive, continuous investmentS tinder the guidance of a full-tins instructor. Some cosmiunities racy wish to isitieta fare busmnec~ management programs with only one-quarter to one-half elite of aria instructor devutad to the program. The "well-organized" programs have been usad as a basis for explaining the relationship of education to fame income to permit schools Co estimate the returns they may expect to accrue from a limited program.. It Ia aasuxned that program organization arid t~pitG~I~ would be similar. to "well- organIzed" programs even though the number of participertts would be limited. One of the primary purpustS af this etudy was to determine whether the economic returns to o,du.lt farm business menugearett were subject to the dimin- ishing earginal returns effect. To otucly the nature of the changes in labor PAGENO="0407" 3027 S eareit~gs, raturr~ to capitni and fatnily labor, and total far~n saies~ it ~as rtecessary to use statistical eettiods ixvolvi~g the use of rvilinear, o~ polyrusnial, equations. The equation which bent ~cribed the ralationabip between years of per icipation measured by the aunbe~ of farm business records analyzed and the various mneesure.e of economic returns are ropreaant~' ed by diagrass in the material which foUotrtm. Labor earniogs should reflect th~ true rtturn to operator's lebor and eanagament while corcpcnsatieg for differences in supply of tastily labor and capital investment. Cvancara's study suggested the hypothesis that labor earnings would exhibit the di nishLeg marginal return effect with additional educational investments .~ Figure 1 illustrates the relationship between Trees Lthor earnings and participation in farm buatneas management education based upon. farm. families enrolled La "well~orgaeized" programs cortductcd by. full'timne instructors. The nmae value for the first year wee $3,000. The value increased to nearly $4.00() in the second year and over $4,000 by the third year. After the third year, the values dropped but were still above the starting value of $3,000. The valut in the sixth year was about $3~Z00 but then began increasing at en accelerated rate. ~y the tenth year, the steen labor earnings was up to $10,500. As thoR2 of .510 itt Figure 3. shows, half the variance in labor earnings was accounted for by the musher of years enrolled in farm busine~a menagerasut education. It was hypothesized that a plot of indexed mean labor earnings for participants in "vell-orgsnized" programs would be very similar to Figure 1. As Figure 2 illustrates, the fluetuag1a~ is store pronounced than in Figurq 1. In. the first year, the indexed nasa valua.is close to 100,6 The seeond and third years show increaseg to almost 140. After the third year, the values gradually decrease to a minimum of about 110 in the seventh year, After the seventh year, the values increenad sharply until by the tenth year the indexed steam labor eareings were about 2.4 tines as great as the indexed values for the first year. The proportion of the variance accounted for by regression was about the same as in Figure l~ as It2 of .404 was cal- culated for Figure 2. It is possible that vocational aducatots may be alarmed with the appar~ ant decline in economic response t~ increments of education during the fourth, LLfeh, and sixth years of fern business management education. The decline in expected labor earnings following the third year of irmetructiomi must be viewed In. relation to the emphasis on improvement in.the farm business organization end the natural temporary di~ruptiott of the profit-producing capacity of the farm business as acljuarmettgs are made in the dtploysttttt ni! resources. the first-yeamr record averages were. arbitrarily assigned a value of 100, the mathenatical equation whieh describes the relationship of the variables sheets time best-fitting liste for the entire continuum of educational to be slightly less than 3.03 for the. first year. PAGENO="0408" MSCL1 is Dollars 2000 0 3028 9 R2~5l0 2 3 4 5 6 7 8 9 10 Years of Participatioz~ FIgure 1. EELAT10~SB1t~ flETWEEN MEAN LABOR EARNINGS ANT) ADULT ThEN BUSINESS MANAGEMENT EDUCATTON.~' ~J Based upsa faraers earolle4 In il-orgasized" adult P~Q8~ars coaducted by full~tiae lestructors. 12000 10000 6000 6000 4000 1 PAGENO="0409" 3029 10 of Me~i 350 300 250 2 2Q01 / 2 150 100 50 3. 2 3 6 5 6 7 8 9 10 Years of ~arUci~atiot~ Figure 2 R~LAT10NSH1P BET~C~N 1ND2X~D MB~4N LM~0R EM~N!trGS AND ADULT L?ATc?~ BUSIMESS MANAGE~NT EDUCATI0NA~ B~tsed UL~O~ fat nara ~tLro11e(l 1~ "c~e11-orgaatte4" ath~1* pro~rat~a conductad by ~u1?-tiw~a itructo~1~ PAGENO="0410" 3030 ii Th~ inlUal c~z~i~g~o t~v4~ ~.a fatin bt~a~ ~a g~eat an a anuit of ~n~ageir~ttt iantr~ct1on and applicaUoa of fart bunine~s aiaiys~.n ~nftim ars thona which pr~wLde 1ncraa~ad profits without najor reallocation of ~eaource0~ The obvious ovemauts in auc~h things as rations for liastoch, improved crop cultivation pm cites end themicul weed control make lavge int-' Uni c tiburions to farm income. The dihiag nnr~taal retura effect, however, places practical cai~-ugs on fern earnings by a ptations of this hind of ~.hnology. further prove3etnt in income capacity rec~t~f ran eaerrl" nation of the al eation of aurces and reorgar~ization of vital prectuction inputs. ftnions in a fare vinsas or tration any be expected to tenon a cetsporary dierupUon in the ofit~produeict~ a anions of the fern business. fran a revision in resource allocation which resulted in expansion of en enterprise would necessitate adaptation of technology on a larger scale then previously practiced and would at the came Ursa be accompanied by expansion in capital investments. Response trots such changes in often delayed as ad-' justmetsta are made in buaines~ operation. At the same tine, the operator becomes more skilled in menagemetit of the cew or expanded enterprise. The rapid Increase itt earnings following the adju~teient period is a natural response to expended business capacity and inprov~d management skills. The discussion of return to capital and fetidly labor and total feats sales, which follows, reInforces the assumptions made La describing the response of earnings to educational investment. Since labor earnings and return to capital and family labor are bot~h measures of tarts income, it might be expected that the general form of the relationship between mean return to capital and tautly labor and yearn of participation in feats business menageceat educ~tio~ would be similar to that for labor earnings. figure 3 shotr~ that the mean values of return to capital arid family labor do not show an initial increase as did labor earnings in Figure 1. The first-' year value was about $5,250. This figure decreased slightly in the second and third years - In the fourth year, the wean return to capital accelerated sharp- ly. By the tenth year, the expected value was over $16,250. This marginal return represented an increase of epprotcttaately $11,()Q0 over the value report- ed for the first year. figure 3 shows that the fern business meriagesant education accounted for 22.9 per cent of the variance in returm to capital and femily labor. It was assumed that the index of the mean return to capital end family labor for participants in "well-organized" progrosts would vary in much the cease fashion as did the steam values reportad in figure 3. However, as Figure 4 shows, the best--fitting relationship between education and income was a straight line. The straight-line relaticra-ehipa started at an index value of approximately 60 in the first year and went to an index value of over 210 Ia the tenth year. The low R2, .143, reduces the usefulness of thin equation in predictIng ferns earnings. PAGENO="0411" 3031 12 Mean irL Do11a~ 18000 .229 15000 12900 9000 6000 3900 0 2 3 4 5 6 7 8 9 10 Year2 o~ Picipation Figure 3, RBL&TIONS}LIP 88Th88N i~AN 8~WBX~ TO C~U>ITAL AND FAMILY LABOR AND ADULT FARM BUSIN~S~ ~ENENT EBUCATIo~;a/ - ~-~` 8ased upon fa~onra enrolled ie "rrall'-ozgenizcd' odult programa conducted b~ fui1-ti~ne instrueto~s. 1 PAGENO="0412" 3032 13 Iude~ of 350 300 z50 .143 200 150 100 50 Figure 4. RELATIONSHIP BETWEEN INDEXED MEAN RETURN TO CAPITAL AND FAMILY L~B0R AND ADULT FARM BUSTWESS MANAGEMENT EDUCATION4 1 2 3 4 5 67 8 9 10 Teara of Perticip~tioa 21 Based uoa f~irtners enrolled It,. "ttell-organlzed" adult progrztra conducted by full-time instructore. PAGENO="0413" 3033 14 Total Farm Sales Bonause it has an effect not only on economic returns to the farmer but also to the community, total farm sales was an important measure of returns to investments in the adult farm business management education program. With Cvancara's study of income as the basis of expectation, a diminishing marginal returns effect was anticipated in mean total fare aale~ for farmers in "sJell-orgartlzed" programs. The graph in Figure 5 reports an ~ncreasa in `ream calms from $19,000 to $21,000 In the first three years. Yesrs three, four, and five have nearly the some value, but it increases at a sharply increasiag rate with subsequent increments of educational investment. After tee years, the wean value was almost $67,000. This was $48,000 more than the, mean sales for the first year. There was a strong relationship between farm sales and education as indicated by the R2 value of .721. It was expected that if the relationship between the Index of mman total farm sales and yearn of participation were plotted for farmers in "well-organized" programs, the resulting graph would be similar to the graph of ~neaa total farm sales. Starting at an index of 105, Figure 6 shows the value of the index of total farm sales to be about 120 after two years and then level off oncil the sixth year. The index of mean sales increased at an accelerated rate altar the sixth year. With accu- racy relatively high, as suggested by the R2 of .679, the value of the index of total farm sales after ten years of instruction is more than 3.85 times the value computed in the first year. Decision ~p ~ A rational decision to enroll in farm xnanagamant education classes is based upon the relationchip of expected benefits to the expected costs. Farmers ask the inevitable question, "Does it pay?" Likewise, a communIty school contemplating the addition of en adult farm b~si~~~s management pro- gram must answer the same question, but must also consider the benefits the counim.icy may expect to receive from expenditures for salaries, supplies, capital outlay, and supporting services. WhIle both indIviduals and coemuajtiea seek answers to the question, "Does it pay?", the factors which are included in calculating benefits and costs depend upon who is making the inquiry. Itt either case, the rational decision rule simply states: "The sum of the expected benefita, both eco- nomic and social, must exceed the expected coats." Should an eo~lysis of an educational program provide data in terms of the decision rule, then the prospective enrollee or community need only to compare the benefit-cost ratio of the educational program to ratios which way be obtained by alter- native choices of investment. Benefit-Co~,t Determinations for The data in thia study provide a basis for estimates of monetary benefits by reporting the index of the amen value of labor earnings for each of the first ten years of participation in a farm business rnnagement educacion program. The first eight years have been arbitrarily chosen to PAGENO="0414" 3034 15 Me~u~ i~t Do1ia~ 60000 50000 40000 30000 20000 10000 1 2 3 4 5 6 7 8 9 10 Yeax~s of PartlcfpaUotL Fi&ure 5. RELAIIONSRIP BETWEEN 1~EA!~ TOTAL FARM SALRS J~IW ADULT FAI~M HANAGEMENT EDUGAi~tONPJ Dosed uport farnarr~ ertro11~c1 irt ~ ~tdu1t pro~rrt~r.5 cotr4ucted by fu11-tirrr~ io~e~c~tors. R2~721 a PAGENO="0415" 3035 16 ~679 350 300 250 200 150 100 50 3 4 5 6 7. 8 9 10 Years of P~rticipatjo~ Figure 6. RELATIONSHIp BETWEEN INDEXED MEAN TOTAL PAR! SALES AN)) ADULT FARM MANAGEMENT EDUCATIOM~/ Baged upon farcoars enrolled in ~ee11-or~az~ized~ adult progratrn conducted by fu11-~ime instructor~. Index of Mean 1 2 PAGENO="0416" 3036 17 illustrate the benefit-cost ratio obtained in fern business nanagesent programs. To convert the indaxe-d value-s (which were reported in Figure 2) to dollar figures, the weighted average labor earnings ($3,OOO)~ of farmers who had their first record analysed was multiplied by the index value. Column-s (b) and (c) in Table 3 show the indexed and the dollar values of expected labor earnings for each of the eight years of instruction. Table 3. DISCOUNTED BENEFITS OP EDUCATION TO FARM FAMILIES ENROLIAI) IN "WELL-ORGANIZED~' FARM BUS TRESS MANAGEMENT EDUCATION PROGRAMS BASED UPON LABOR EARNINGS ADJUSTED FOR TAXES ------- (a) (b) (c) (a) (e) (f) Dollar Marginal Marginal Years of Value Return Re-turn Discounted Partici- a1 Using Over Aftgç Marginal pation Index- $3,000 Base Year Tax- Benefit _ 1 .97 2,910 $ -- 2 1.30 3,900 990 806 704 3 1.40 4,200 - 1,290 1,049 856 4 - 1.35 4,050 1,140 927 707 5 1.23 - 3,690 780 - 636 45~ 6 1.12 3,360 450 368 245 7 1.10 3,300 390 320 199 8 1.25 3,750 _~tL ~684.~ .~i_. - Sums $5,880 $4,790 $3,562 sf Based CtL the statistical estimates of points on the curve in Figure 2, page 10. - - - Tax adjustments based on 1967 Internal Revenue instruction-a for filfng individual tax returns with allowance for five depe~idents. In this study benefits that may have ecerued to the average fe-ra family during their initial enrollment year were not con-aide-red as being due to farm management instruction. Total program ben-cuts were calculated us the sum of differences between the labor earnings reported by farmers with two, three or See Figure 1. PAGENO="0417" 3037 18 succeeding years of instruction in comparison to earnings of farmers who were analyzing a farm business record for the very first time. The sum of the marginal returns over the base first-year records for the first eight years of instructIon was $5,880. Marginal returns over the base year had to be adjusted for the effects of income tax to provide a true measure of spendable income. Income tax adjustments were made using the accrual method. Because the data showed the average fans family to number 5.12 people, tax adjustments were completed based on 1967 Internal Revenue instructions for filing individual tax returns with an allowance for five dependents. Adjustrrnncs were made in taxable in-- come to allow for non-cash expenses used in calculating labor earnings. The sum of the tax-adjusted marginal returns to investments in farm management education for an average farm family was $4,790. Expected future ret urns are reduced to their present value by a proce-. durn called discounting. The present value of future income depends on the interest rate, the expected returns, and the number of years before the return is collected. For example, a farm family who might expect $634 in marginal spendable income five years hence could have the same return by investing $453 now at seven per cent interest for five years. The total present value of benefits for eight consecutive years of participation itt farm business ennagement education was $3,562 for the average farm family. Costs to the Farmer Since both benefits and costs are components of the decisiott rule, it is necessary for farmers to have an accurate estimate of the costs associated with farm business management oducarion. There are two types of individual costs; opportunity costs and direct costs. OpportunIty cost is the approximate value of the farm operecor'~ labor if ha were doing productive work rather than participating in the education program. Study date showed an average farmer's working time was worth about two dollars per hour. Most "well-organized" programs of farm buaIne~s management education have two different levels of intensity. The first three years involve high intensity instruction; the subsequent five years have less intense instruction. For purprees of Illustration, researchers assumed the aver- age farm family enrolled In one of the first three years of intensive instruction rCceived twelve on-farm instructional visits, ettendsd three group meetings, and want to ten evening classes per year. Group meetings are defined as meetings of special Intereng to two o~ more cooperators. They are generally held during the working day. Attend- sitce is usually restricted to farmers enrolled in the farm management education program. Group meetings are often conducted on the farm of one of the participants and may include tours, field days, and special farm clinics for farm management education cooperators. Evening classes refer to instructional meetings held for a specific farm rtanagement education class. `The purpose of thie form of instruction is to discuss applied economic principles, new farm technology, or business 78-226 0-77 -27 (Pt.4) PAGENO="0418" 3038 19 management procedures that are applicable to all farmers enrolled in the class. Attendance 113 limited to those regularly enrolled. Both farm coop- erators a~d their wives are encouraged to participate itt the evening claa5 sessions. Meetings generally last for t~Jo to three hours and are scheduled to meat once each month durIng the entire year. It was estimated that a inmniuzuis of two hours was invested in each of the ciasst~, group meetings, and on-farm instructional visits. In addition to time investacuta in class meetings and on-farm instruction, it was esti- mated that a fax-ear spent about eight additional hours keeping the detailed farm records needed for analysis than he would otherwise have used to keep minimum accounts for income tax purposes. The opportunity coec for evening class hours was reduced to half the normal rate of two dollars since leisure tiu~ area sacrificed instead of woik time. Table 4. D1SCOUNIED COSTS OF FAR1~RS ENROLLED IN "WELLORGANIZED" FAR!4 MANAGE~NT EDUCATION PROCBA~ (a) Years of ParticIpatiOn - (b) (c) (d) Ce) Opportunity Direct Total piscounted Costa Costs Costa Costa I $96 $64 $160 $150 2 96 64 160 140 3 96 64 160 131 4 52 46 98 75 5 52 46 98 70 6 52 46 98 65 7 52 46 98 61 8 52 46 98 57 Total Discounted Cost $849 ~---~-~ The last five years of instruction involved different time irtventrstanta than the Lirat three years. It was assumed that farmers ettrollmd during this period received six on-farm instructional visits, utilized eight hours keeping 3dditianal farm record data, end attended six evening class sessions. Column ~o) in Table 4 reports the total opportunity costs for each of the eight years. PAGENO="0419" 3039 20 In addition to opportunity costs, i~divlduaj~ incurred direct coat3 by participating in the farm rsartagernnt education program. These costs included $25 for each farm business record analysis, $3 for miscellaneous class purchases, $3 transportation expense for each evenjng class attended arid $2 transportation expense for each group niseting. Direct costs dropped from $64 to $46 in the fourth year as reported in coluaxi (c), Table 4, du.e to a lower intensity of instruction in the last five yearn. The total estimated costs incurred by a farm family were discounted na~ng the same interest rate and procedure as for program benefits. The total discounted costs for participating in a farm business esnagernent education program for eight consecutIve years were $849. The Farmer'a Benefit-Cost Ratio Once one knows the expected benefits and the expected costs, he has the necessaty information to make a rational decision. The benefit-cost ratio is the present value of future benefits (from Table 3) divided by the present value of future costs (from Table 4). The benefit-cost ratio for this study was 4.20, $4 20 Future Costs 849 FOR EACH DOLLAR INVESTED BY A FARtIER IN TEE FARN BUSINESS MANA~~NT EDUCATiON ~ Although the individual benefit-cost ratio was calculated wIth the assznptiors that there would be no benefIts in the first year, other studies have, shown that Sri. economic return can be expected to occur in the flrst~. year. Cvancara's study showed a farmer could expect returns to instructlca during the initial year even though the farm business record analysis was not yet available. Therefore, the actual benefits from program participaUon are probably greater than the conservative estimates used itt thIs study. While a true accounting of benefits from education must include social and aesthetic values derived from the educational experience, these non~ tangible benefits cannot be easily determined. To simplify the calculations of benefits from the educational investrent, all intangible returns ware left unexamIned In the computations of individual benefIts. Since this study included all the costs e farmer would incur by parcic- ipaung in farm business management education and since it used conservative estinates of the benefits, the beris fit-coat determination tended to under- estimate rather than overestImate the banefit-to-cost ratio. P~in~Be~ie,~-Cost ~ Labor Earnings - A Farm Business ~snagcmenc Education Program would normally enroll about fifty farm families. Some would be enrolled in their initial year while others say have already had two or more years of previous instruction. The total enrollment would consist of families who had a wide range of previous instruc- tion. Experience has shown that a few families drop out as they become more PAGENO="0420" 3040 highly skilled in decision isaking. Others way drop out as they develop `record keeping fatigue." A distribution of farm families with various enrollment histories is shown in Table 5. Such an enrollment pattern permits a new class of ten cooperators to be started each year and thus conforms closely to the enrollment patters experienced in seams existing farm business management programs. Table 5. COMMUNITY bENEFITS FROM FARM bUSINESS MANAGEMENT EDUCATION PROGRAM FOR FIFTY-thE FANILIESA' Years Enrolled No. of Farmers Matgirtil La Eam~nim~g~ per bor Farmer TOtal Marginal Labor Earrmiugs2i 1 10 $-- $ 2. 9 990 * 8,910 3 9 1,290 * 11,610 4 7 1,140 7,980 5 5 780 3,900 6 4 450 1,800 7 4 390 1,560 8 3 51. 840 $3832.80 Based on labor earnings. W Total discounted benefits for eight-year period are $247,411 using earse discounting procedure and interest rule as was used for computation of individual benefits. The decision to initiate a farm management education program in a community is based on the same decision rule as that used by the farm family; the sum of the benefits must exceed the sums of the costs. The community, however, has several coats not included by individual farm families. Thus, the procedure for computing the benefit-coat ratio for the community is wore complex. Total economIc benefits to the community can be computed by including the sum of the benefits to the individuals enrolled. The economic benefits in thIs study were calculated using the Individual returns shown In Table 3 with class members distributed in management education experience categories as shown in Table 5. For example, tea members in the first yeer of instruc- tion were assumed to have no marginal benefit from fern business management instruction; nine members in the second year of instruction were expected to have a marginal labor earnIngs of $990 each. The total class enrollment of fifty-one students would expect $383280 to accrue each year ma a result of instruction in farm business management. Calculation of these benefits is shown in Table 5. PAGENO="0421" 3041 22 Because coisnunities stand to benefit from all inconna, including that spent for taxes, the community return was basad on gross marginal return rather than net return after taxes. When labor earnings were used as the measure of economic return, the annual total community benefit was $38,280. A dacf~jon to establish a farm business educt- tion program ham long-range effects. To measure the benefits over am extended period, benefits have been discounted for en eight-year period, The same procedure for discounting was used as previously applied to individual benefits, The total present value of the benefits that might be expected to accrue to a community over am night-year period from ferns business management education is $247,411. This sun includes only addi- tional labor earnings to farm operators em a result of instruction and ignores the additional business activity generated by increases in farm sales and the multiplier effect of new expenditures. Total community costs include those borne both by fodividuals en- rolled and the community school which sponsors the educational program. Costs can be readily divided into four categories; 1. Opportunity Co~t~ of 1nd-ividual~ Enrolled - This study assumes that the opportunity costs for the community are equal to the rum of the opportunity costs for indivicluala enrolled. Opportunity costs discounted for eight years for a class enrollment of fifty-one cooperators equals $25,202. 2. Direct Costs of Individuals Enrolled - It was assumed that costs for the community were equal to the sum of the direct coats for iadivfduaj~ enrolled. Discounted direct costs for cm eight-year period equalled $18,422. 3. Direct Community Coats - Some operating costs were based on data from the Agricultural Education Sacmioa, Vocational Division, Minnesota Department of EducatIon; others were derived from estImates of general supporting cOsts. Summary of these costs is shown In Table 6. Total direct operating costs discounted for an eight-year period equal $74,565. 4. Capital costs - foam capital outlay would be required to provide feciljties and equipment for program operetion, Table 7 outlInes the capital outlay requirements. An annuity rate of .08024 per cant would result in an annual capital cost of $711. This annuity rate would recover capital outlay costs in twenty years with en annual yield of five per cent internet on Investment, Total capital coat for the eight years used in this example would be $5,688. Unlike other costs, capital outlay is not discounted dos to the annuity pro- cedure of computation. PAGENO="0422" 3042 23 Thble 6. ANNUAL COMMUNITY SCHOOL OPERATING COSTS FOR A PAEN MANAGFItENT PROGRAM EMPLOY 1MG ORE PULL-TIRE ADULT INSTRUCTOR Item Annual CostW Salary of Instructor $ 9,37&bi ileaga 717321 Meals & Lodging While Traveling 150k' Janitorial Service (1/2 hr. Iday for 2.50 days 8 $2/hr.) 250 Secretarial Assistance (1/10 time 8 $360/month) 432 Teaching Materials, General Of fice Supply 400 Fuel) Electricity 150 Telephone _... Total Direct Expanse $113537 !J Total discounted direct program costs for en eight-year period are $74,565. The sans discounting procedure was used as for computation of benefits. From data supplied by Agricultural Education Section, Vocational Division, Minnesota State Department of Education; all other costs based on estimates of actual costs. The procedures for computing community benefIt-coat ratio Is sicilar to that for indivIduals; the sun of the benefits is divided by the sun of the coats. In the case of the coirniunIty, the sum of individual benefits was discounted OVCT a period of eight years. This total benefit was $247,411. Total costS were also discounted for eight years. The sun of individual opportunity costa ($25,202), individual direct coats ($18,422), corsnixnity direct operating coat ($74,565), and capital outlay ($5,688) was $123,077. The beneftt-cost ratio iS computed as follows: T(\ta1BnefitstotheCos~DNr.~ = ~ 997 Total Costs to the Gonaunity $123,877 ~~CffDO~RT~AT TEE COMMUNITY SPENDS ON FARM BUS FUESS MANAGEMENT EDUCATiON, TEEi _C~ EXI~L~0 GENERATE AROUT Th'O DOLLARS IN_INCREASED FAPII ~OR EABE ~ PAGENO="0423" 3043 24 Table 7. CAPITAL OUTLAY FOR FARM BUSIMESS ~ AGEMF.NT PROGRAM its-rn Office(8' x 10' @ $l7.24/eq. ft.)g/ $7,586 Conference Room (12' x 15' 8 $17.24/eq. ft.) Office Equipment / Desk 6 U-~a-ir $176 * Filing Cabinets 204 Typewriter 200 Calculator 600 Portable Adding Machine 100 Total OffIce EquIpment _______ Total Capital Outlay $8,8~i - Yearly Cost of Capital Based Upon Annuity Rate of 20 Years, 5 Per Cent Interest $ 71i~~ -~ *_~_ --- -*~-- Al Average bid price for new school construction, 1966, Minnesota /` Department of Education. Total cost of capital outlay f,oz eight-year period equals $5,68L- Farm Sales - / - Labor earnings may be itraconeervativa criterion macsure of the impact of farm business man~/gemsnt ~ducetio~ àiece it fails to account for gross Income earned and apa~t within the community. Community benef1t~ of the educational program a~y beat be measured by increaee~ In farm sales that can be. assocIated with pdrticlpatiom in the farm business management program. Money which accrues to farm families from farm salea is used for operating expenses, family living, debt retirement, savings, cod capital inveatunnt. Regardless of the way in/which this money is used, the community derives benefit f-corn the imcreas~d business activity. Table 8 shows the annual Increase In farm sales that night be expected to accrue to the fifty-one farm families described in the previous benefit-cost example. With farm sales as the criterion measure, the total discounted bane- flta for en eight-year period of farm business management instruction would be $1,122,398 for a program enrolling fifty-ens- farm families. The costa would be t1-~a cams as reported previously, $123,877. PAGENO="0424" 3044 25 Using these aetna in a benefit-cost comparison gives a benefit-coat ratio of 9.06. !9~~!~ s~PtN Lcjj~9!jL~_~ARM BIJS IMESS MANAGE~' MENT EDUcATIO TEE cO~ NIT COULD EXPECT TO RECEIVE $9.06 IN INENE BUSINESS ACTIVIT'i~. Table 8. MARGINJ~L FARE SALES ASSOCIATED P1111 ENROLLMENT IN FARM BUSINESS MANAG~fENT EDUCATION Yaarø Nuther Marginal Parts Total Elargin9l Enrolled of Farrera Sales per PareA' Farms 1 10 --- 2 3 9 9 2,660 3,230 23,940 29,070 * 4 7 2,850 19,950 5 5 2,660 13,300 6 4 3,800 15,200 7 4 7,220 28,880 5 3 51 14,440 $173,660 . .. RI Based on the statistjcal estimates of points on the curve in Figure 5, Page 15, and average farm sales reported in first-year record analysIs, 1959-1965. ~9J Total discounted benefits for eIght years using discounting procedures defined for fodividual benefits equals $1,122,398. Data and conclusions reported in this stunnary are only a portion of those reported in the ante ertertaive work from which they are drawn. The inquiry was guided by the following questions: What benefits earn accrue to farm families who choose to participate itt an lutenoive, goal-orIented, educational program intended to improve their technical competence end management skills? What benefits eccrue to the coamnumnity that chooses to support such a program? What ore tha b~ncfit-co~t ratioS of such so educational program when calculated far the indi4.dual partic- ipant ~ad for the community? What is the educational end cbs economic relevance of the performance curves which dee tribe the input-output sale- tionahips of the educational program outlined in this inquiry? What are PAGENO="0425" 3045 26 the short-term and long-term irspiicatiotts of such a program? The educational program described in the study -is art intensive, continuing course. Participants are engaged in classroom, small group, and individual, ott-farm instructIon. Instruction is intended to improve technical competence and entrepreneurial skill. Each partIcipant is re- quired to keep accurate production and e.rpensa re-cords and to submit his farm business records for surrnaiy and aoalye~s at the close of the fiscal year. As a result of directed study of the business analysis, a farm operator tnalces changes to maximize hIs econosic return insofar as that will contribute to h~a Individual and family goals. The instructional program upon which this study is based meets rigorous criteria of organi-' ratiort and goal orientation and is described as "well-organized." The criterion variables for the study are operator's labor earnings (a measure of net income) and total farm sales. All monetary values are weighted to compensate for factors affecting yearly fluctuation in fare income levels. These criterion variables are used to calculate the return to individuals and to the community. The participants in the study were farmers who were enrolled in farm business management education in vocational-agriculture departments of Minnesota public schools for time periods rang~eg from one to fourteen years. Each of the participants was self employed; each was respcnsible for his own managerial decision staking. The choice of farmers as the recipients of the instructional program has some unusual complexities. It Is necessary, for example, to have a- complete and accurate system of farm account-s to measure ecoaozrrtc gaint~. It is also necessary to have an instructional program that is highly ind~- tdduallzeci. There are also some unusual advantages in having farmers involved as the students in the program.. Farm income is vary responsive to changes in entrepreneurial skill among farm operators. There are few. regulatory forces (industry-wide wage contractS, product-pricIng rsethanissts~ etc.) to establish limits within whIch a farmer may benefit from his ability to manage his productivt re-sources. The farmers involved in the study did rtot, however, constitute the sampling unit. The sampling unit was a completely-analyzed annual farm record. In this study, 3,518 darts records were studied. Of these, 1,475 were from programs judged to be `well-organized." l~ajor conclusions from this study are based upon performance curves calculated from farm business and educational input data.. These perfor- mance curves were calculated by the technique of curvilinear regression. The performance curves repreaent the relationship of the criterion vari- ables to the instructional program. The general fox-rn of the performance curve for both criterion variables is as shown in the following figure; PAGENO="0426" 3046 Returns 27 `fears of Instruction The shape of the performance curve ebo~rs a rising return to educe- tional input during the firs t three years a decline during the fourth. end fifth years, and a sharply rising slope beginning ~rith the sixth or seventh ye.ar of the instructional program. An increase in return during the first three years may result from modern technologies which are rather easily applied to the existing organization of the farm resources. During the fourth and fifth years, the farmer may respond to instruction by reor- ganizing his business. Re revises his combinations of resources) re-ezam--. ices h~s productive capacity and introduces a functional reorganization. The business may be reorganized to aecomnodate the new levels of efficiency. that are available to meet hIs production goals. The fourth end fifth years, thus, are a period of retoolIng to w.amieizs the return on available resources. The rise in return beginning with the sirtb or seventh year is the response to a sore efficient utilization of aveilable resources an4 a mare effective use of entrepreneurial skill. A specific issue which prompted the inquiry involved the question of whether the decline in returns during the third and fourth years was a diminishing marginal return to ii~struction. Other studies had suggested that the dinfoishing marginal returns to instruction may begin to occur during the third or fourth years. This possibility raIsed important questions for school edrniaistrmtora a~d educatIonal planners. Should a teacher plan only a three-year curriculum end, thus, confine his energies to the period when his instruction shows a rapidly rising return on the iu~c~~ment? When there is an apparent "diminishing marginal returns effect," should the teacher begin with an entirely new grcup of students so that he will always be engaged wIth instruction which yields an imse- diets or an early response? Those who advocate restriction of fame business management education to three or le~a years will fail to accommodate the, increased need for decision making that occurs as part of business reorganization. Pallors to provide educational service at this most vital tine may deter the fees family from fully utilizing the income production potential that may be derived from careful study arid assistance during planning and initiation of resource reorganization. PAGENO="0427" 3047 28 The "diminishing returns effect,' while a practical administrative question, is rtot subject to precise measurement in this inquiry. For precise analysis, it would be necessary to insure that the increments of educational input are approximately equal over a given time scale. As in most research on educational investment, these increments can only be assumed to be roughly equal throughout the instructional sequence. An important conclusion is that the return on en educational invest- ment described as the instructional program used in this study is very high. The extent of return is treated In the benefit-cost analysis to be discussed in the later paragraphs of these conclusions. The existence of a significant return on such an investment was a verification of previous inquires which had been limited to a shorter time span. A major Interest in the present study was the determination of the nature of the return over the longer period represented by the performance curves. The results show that the return is not uniform over the longer time period but that returns do accrue to those who are persistent in participation. Moreover, the return for this persistence is great. The decline in return during the fourth and fifth years is more a function of the instructional program than a "diminishing return" effect. Since the business often undergoes major changes, instruction to guide reorganization is essential to increased return. The educational implications of the study are enormous. First of all, the performance curves, which were calculated to ascertain the nature of response to an educational input and to detarmlne the phenom- enon of a diminished return, may not necessarily have any relationship to the economic phenomenon of diminishing returns. The performance curves have the sane general form which describes the psychological phenomenon known as the learning curve. This curve is positively accel- erating at its beginning, becomes negatively accelerating, and, finally, reaches a plateau and the cycle is repeated. The performance curves, like learning curves, may be manageable. They depend on varfebles which affect the learning situation. It is the function of education to cpU- mire the conditions which will maximize both the amount of learning and its relevance. If the performance curves in the inquiry are an eccurete. interpretation of learning curve phenomenon, then this study is among the first to describe such a learnIng curve over an extendad time span and also to calculate the cm.irva as an economic return to sri investment in Instruction. Further inquiries, accordingly, may contribute to learning theory as well as to a knowledge of the instructional variables which affect the economics of education. Secondly, in addition to the theoretical implications of the perfor~. smarice curves, there are practical educational conclusions. Although this inquire ties dealt with an educational program for self-employed adults, the Instructional program is amenable to the efficiencies of modern educa- tional technology. Some of the farm records ured as basic information for the study were analyzed using a system of electronic data processing (ED?). The calculation of benefIt-cost analysis for the educational program is a demonstration of the use of program plannIng and budgeting (PPB) systems for community instructional programs. As a form of systems analysis, the PPB system ham region-wide epplicabiJity to educational programs as well PAGENO="0428" 3048 29 as applicability tO individual school programs. The instruction provided to farmers ía this inquiry was intensive. Since instruction is sequential and prograsusatie, it is highly amenable to ceeputerassieted instruction (CAl). Further efficiencies end, thus, mere wide.spread growth of the ins tructional program used to this study may result from coebthattons of the various forms of systems analysis. with additional developmental effort, this is likely to be an ouccone of this raee~arch. As mentioned earlier, the extent of the return on the educattonal investment ties verified by a benefit-cost analysis. tame fIts iucluded those to the comeunity s3 well as to the itdiwIdual. Costs Included all IndIrect costs, including opportunity coats, as well as direct coats. The benefit-cost ratio for indIvidual participants over the eight-year period was found to be 4.2 to I. For each dollar invested in the program by the individual. increased return to his labor and management was $4.19. As further verification of the benefits of such a program, a baasfit cost ratio was calculated for the community. Community benefit was assumed to be the total of the individusl.benSfttS. $ince there are nmaer000 con- entity benefits to be derIved Iron an increasm icr cash flow and an increass In the tax base, using only the aggregate increased return to operator's labor and management underestimates the actual community benefit. The benefit-cost ratio of the program when benefits are measured by increaeCd returo to operator labor and eanagament wan about 2:1. When farm sales were used in calculating increased business activity, the benefit-cost ratio increased to about 9:1. Any investment with a benefit-cost ratio simIlar to that shown for education in farm business management is a valuable holding for the con- isumity. An cosraunity action groups,boarda of eciucatlon, chambers of commerce, and others seek ways to build affluence in rural communities and protect local economies * farms business management education should be emcng the high priority alternatives. Minnesota revolves around the agriculture industry. A strong, dynamic and profitable farm business is the rural community'8 most valuable asset. PAGENO="0429" 3049 VETERANS OF FOREIGN WARS OF THE UN TED ST(RTES Was~NGTo N, D. C. 20002 July 15, 1976 The Honorable Vance Hartke, Chairman Committee on Veterans Affairs United States Senate Washington, D.C. 20510 My dear Mr. Chairman: Thank you for your letter requesting comments regarding your amendment No. 2005 to S. 969 which is in the nature of a substi- tute and identified as the Veterans Education and Employment Assistance Act of 1976. First, let me state your amendment contains many fine fea- tures which the Veterans of Foreign Wars of the United States can wholeheartedly support. However, those of us who work with legis- lation are not fond of omnibus bills which more often than not use relatively uncontroversial measures as a vehicle to advance other measures which may be highly controversial. For example, in the instant case, we consider an 8 percent cost of living increase in educational assistance allowances as both uncontroversial and funded in the first concurrent budget resolution, but the establishment of a new SI Bill for members of the Regular Military Establishment to be funded in part by the Veterans Administration highly controversial. We much prefer clean bills addressing one issue which can stand or fall on their own merit. In addition to the foregoing, and due to the fast dwindling number of legislative days before the 9L~th Congress adjourns sine die, there are a number of pressing items which must be resolved and cleared for the White House on a priority basis, and these are: (1) An increase in compensation rates for veterans with service connected disabilities and dependency and indemnity compensation for the survivors of those who expired due to their service connected disabilities PAGENO="0430" 3050 - -2- (2) The advancement of pension legislation by res- olving differences in the Senate and House passed bills before the expiration of Public Law 9'~-l69 with the end of the current fiscal year (3) A cost of living increase for those receiving educational assistance under Title 38 of the U.S. Code who have not had such an increase in nearly two years, and (Lf) Establishing a termination date for accruing benefits under the current GI Bill since the Vietnam conflict officially terminated May 7, 1975. Again, Mr. Chairman, thank you for your consideration in soliciting my views and with best wishes and kindest personal regards, I am Sincerely, Donald H. Schwab, Director National Legislative Service DHS/fr PAGENO="0431" NATiONAL CAPITAL OFFICE ~ C0MMISSI01~Efl OFFICERS ASSOCII1TIO~ of the UIIITED STATES OF AMERICA -~ /~ dA NE S t 510 Washington, D. C. 20002 NCOA Telephone (202) 546-7891 546-7892 Honorable Vance Hartke, Chairman Senate Committee on Veterans Affairs Suite 414 Russell Senate Office Building Washington, D.C. 20510 Dear Mr. Chairman: Thank you for the letter of July 7, 1976, inviting the Hon Commissioned Officers Association of the USA (NCOA) to comment on Amendment No. 2005 to Senate bill S. 969. The Association appreciates the opportunity you have cordially extended. Our comments are attached for the Committee's consideration. Iete,-eaejnna/ Headqsso-ee,-s NCO ASSOCIATION P.O. Boo 2268 San Antonio, Tenon 78298 (512) 663-6161 3051 July 15, 1976 Wit remain, of Legislative CAM/pf ends. PAGENO="0432" 3052 COMMENTS ON AMENDMENT NO 2005 to S. 969 BY C.A."MACK' MCKINNEY, Director of Legislative Affairs NON COMMISSIONED OFFICERS ASSOCIATION OF THE USA (NCOA) TITLE I The Association supports the recommended changes, as provided in the amendment, to Chapter 31, title 38, United States Code. TITLE II The Association has no objection to the recommended changes as provided in the amendment, to Chapters 34 & 36, title 38, United States Code. TITLE III The Association has but one objection to the recommended changes, as provided in the amendment, to Chapter 35, title 38, United States Code. In previous years, Chapter 35 restricted education benefits to war orphans only. Later, the chapter was amended to include wives of service-connected, totally-disabled veterans and the widows of veterans who died as a result of service-connected disabilities. For those wives and widows, who required assistance in preparing themselves and their families for a standard of living level which the veteran, but for his death or service disability, could have expected to provide for his family, eligibility could be established with the Veterans Administration for the receipt of financial education benefits. Enactment of the amendment was certainly rational and justifiable when one considers the unusual demands placed upon the wife because of her husband's disability PAGENO="0433" 3053 and in maintaining a home and raising a family. Not only was the wife restricted in time, but probably lacked employment experience and, for the most, was unable to realize equal wages on the job market with male employees. The Association believes that the average husband of a disabled female veteran is not as handicapped as the average wife of a disabled male veteran. Therefore, Congress should direct the Administrator of Veterans Affairs to conduct a study to determine the necessity of including all spouses and surviving spouses of certain veterans as eligible for education benefits. In light of present and future budget restrictions imposed on the Veterans Administration, the Association further believes that education benefits for spouses should be determined on the basis of real financial need. Summarily, the Association is not in favor of expansion of present statutes based solely on the concept that such changes provide equal treatment to all spouses or surviving spouses simply because their veteran husbands or wives were totally disabled or demised as a result of service-connected causes. TITLE IV The Association continues to be strongly opposed to the proposed termination of existing education benefits provided in Chapter 34, title 38, United States Code, for persons entering the U.S. Armed Forces in future years. Although the Association previously submitted a statement explaining its opposition to the Senate Committee on Veterans Affairs, two additional considerations must be presented. First, the Association objects to the rhetoric of those who attempt to separate true volunteers from draft-motivated volunteers and persons inducted into military service. Their debasement of members of todays all-volunteer force, simply because they truly volunteer to serve the Nation, is unjustified, ungracious and degrading. -2- 78-226 0 - 77 - 28 (Pt. 4) PAGENO="0434" 3054 True volunteers should, if anything, be treated with greater respect and afforded greater rewards from a grateful Nation than those who are forced or motivated by induction to serve in the U.S. Armed Forces. However, in the case of contin- uing the present education benefits for future veterans, who will serve on or after a prescribed date, the Association seeks only equal respect and reward. This is not only fair to all, but certainly in the best interest of congressional desires to maintain an all-volunteer military force. Secondly, the Association objects to the declassification of peacetime veterans and possible separation from benefits provided to eligible wartime and cold-war veterans. Every veteran originally enters the Armed Forces accepting an oath that was and is the same for all. Very few, if any, enter with thoughts of being maimed or killed. Each take the chance of being sent overseas, being stationed in a hostile environment, or being ordered into combat. Each take the chance that the supreme sacrifice may have to be made, or that they will return to their homes crippled and disabled for life. Some go overseas while others never leave the United States or its possessions. Some are sent into hostile areas while others are not. Few actually experience combat, most do not. Some are killed and some are maimed, but many are not physically or mentally touched by the horrors of combat. Is there a difference between a wartime veteran killed in the Vietnam conflict and a peacetime veteran who died in the Mayaquez incident? Is there a justifiable separation between a wartime veteran disabled by a service-connected accident and a peacetime veteran disabled as a result of an identical occurence? -3- PAGENO="0435" 3055 Is there a rational declassification of a peacetime veteran who serves overseas in Germany most of his time in the military from a wartime veteran who served all of his military service inside the continental limits of the United States? Have the Nation's veterans' programs (other than Dependents and Indemnity Compensation - DIC) been based on the amounts of remuneration and the number of emoluments received by our veterans while in the armed services? To each of the above questions, the Association answers in the negative. In fact, the only separations justified are those currently imposed by law and applicable to veterans' eligibi- lity for compensation and pension programs, and others pertaining exclusively to combat-related disabled veterans. Otherwise, there should be no differences of eligibility for veterans' programs based on whether the veteran's service to his or her Nation was in peace or war. Thus, the Association cannot support the recommended changes, as provided in the proposed new chapter 32 of the amend- ment, to title 38, United States Code, and particularly that which allows reinstitution of title 34 benefits in the event Universal Military Service is reimposed by law. TITLE ,V The Association has but one objection to the recommended changes to Chapter 36, title 38, United States Code, and that is that portion applicable to "spouses and surviving spouses" contained in the proposed amendment to Chapter 35. (Please refer to comments above pertaining to TITLE III). TITLE VI The Association adamantly supports the recommended changes, as provided in the amendment, to Chapters 41 and 42, title 38, section 553, title 29; and section 5315, title 5, United States Code. TITLE VII The Association has no objection to the recommended changes, as provided in the amendment, to section 3101(a), title 38, United States Code. -4- PAGENO="0436" 3056 Statement of Austin E. Kerby, Director for Economics Tlio Anr rican Legion before the Committee on Veterans7 Affairs United States Senate on Amendment No. 2005 to S 969 July 19, 1976 Mr. Chairman and Members of the Committee: On behalf of The American Legion, I would like to express appreciation for this opportunity to present our views on Amendment No. 2005, the "Veterans7 Education and Employment Assistance Act of 1976' - a substitute to 5 969, specifically Title VI thereof - the "Veterans Employment Assistance Provisions." Mr. Chairman, for the purpose of this statement we will comment only on those provisions that promise substantive improvement in employment services to veterans. Other amendments under Title VI of the subject legislation are basically technical modifications on which we have no position. Section 601 creates within the Department of Labor a separate agency to be known as the Veterans Employment Service, and stipu- lates that such agency shall be headed by an Assistant Secretary of Labor for Veterans' Employment. PAGENO="0437" 3057 The American Legion's support of this proposal is based on several resolutions, the most recent being resolution No. 1, adopted by our National Executive Committee, May 5-6, 1976. A copy is attached for the record. As mandated, The American Legion strongly supports the authorization for an Assistant Secre- tary for Veterans' Employment. This new position is sorely needed, as evidenced by the Department of Labor's ineffective administra- tion of laws which were intended by this Committee and the Con- gress to improve employment service to veterans. The Department of Labor needs stronger and a more authoritative leadership which the rank of Assistant Secretary would provide. The Veterans' Employment Service is located at such a low level in the bureaucratic structure of the Department of Labor that it is impossible for a VES Director in the "classified (career) service to effectively carry out Congressional mandates intended to assist the employment of veterans. An Assistant Secretary of Labor for Veterans' Employment, requiring appointment to be made by nomina- tion and confirmation by the Senate, would have direct access to the Secretary of Labor and full responsibility for program planning, in- cluding funds and utilization of personnel, and accountability for these Congressionally mandated programs. The American Legion believes PAGENO="0438" 3058 -3- that the very nature and importance of the many laws affecting the employment of veterans fully justifies a spokesman for nearly 30 million veterans at the highest policy level within the Department of Labor. The American Legion strenuously opposes the establishment of any position lower than the Assistant Secretary level to head the proposed newly created agency. We believe that a `Deputy Assis- tant Secretary,' or a "Deputy Assistant Under Secretary" for Veterans' Employment, as some have proposed, whether established by legislation or administratively, in lieu of a full Assistant Secre- tary for Vuterans' Employment would not improve employment ser- vice to veterans. Such positions would normally be in the career civil service, unless the enabling legislation specifically provided otherwise, and the incumbent of such positions would have to infil- trate through several levels of bureaucracy before reaching the Secretary of Labor. Therefore, to insure that this Assistant Secretary position is at the highest echelon and not in the classified (career) service, The American Legion respectfully recommends that the position of Assistant Secretary for Veterans Employment be at Level IV (same as the five existing Assistant Secretaries) and require Senate con- fi rmatio n. PAGENO="0439" 3059 -4- Section 602 of Title VI of the amendment would assure that veterans receive special consideration as required by law and reg- ulations, and adds as a duty of the field representatives of the Veterans' Employment Service the monitoring of Comprehensive Employment and Training Act programs. During fiscal year 1975, veterans comprised only 13 percent of all CETA enrollments to Title I, II and VI. The American Legion believes that this proposed authorization for monitoring by these State Veterans' Employment Representatives and Assistant VERs is badly needed and we support this amendment. Section 606 of the amendment will require the Secretary of Labor to report annually on the number and disposition of veterans' complaints against contractors with the Federal Government who may he illegally failing to give special emphasis to the employment of veterans. The American Legion supports this proposal which should serve to strengthen the provisions of Section 2012, title 38, United States Code. To date there has been very little compliance with the law, as shown by an article in the Wall Street Journal of May 11, 1976, copy attached. Besides other advantages of such re- porting by the Secretary of Labor, it will bring to the attention of veterans and contractors that such a right has existed since 1972. PAGENO="0440" 3060 -5- The Department of Labor has done virtually nothing to let veterans know of their right to file a complaint with the local State Employ- ment office if any veteran feels he has not received fair consideration in employment with a Federal contractor. We thank you for this opportunity to comment on this most im- portant subject - adequate employment assistance to veterans. PAGENO="0441" 3061 NATIONAL EXECUTIVE COMMITTEE OF THE AMERICAN LEGION INDIANAPOLIS, INDIANA, MAY 5-6, 1976 RESOLUTION NO.: 1 COMMITTEE : ECONOMIC SUBJECT : ESTABLISHMENT OF ASSISTANT SECRETARY OF LABOR FOR VETERANS' EMPLOYMENT AND OPPOSE ANY LESSER POSITION. WHEREAS, Congress has established a Veterans' Employment Service in the United States Department of Labor to promote voca- tional opportunities for veterans and to monitor and functionally supervise the many laws related to veterans employment and train- ing; and WHEREAS, Congress has required that the Secretary of Labor shall assign to each State a Representative of the Veterans' Employment Service and additional representatives when justified by the veteran population of the State to carry out the purposes of the Veterans' Employment Service in the several States; and WHEREAS, The Department of Labor has assigned a Regional Veterans' Employment Representative to each of its ten Regional offices to direct veterans' employment affairs in the Region, being responsive both to the Director of the Veterans' Employment Service and the Assistant Regional Director for the Employment and Training Administration; and WHEREAS, Because of the complexity of veterans employment and training laws and programs, including numerous references to veterans in the various titles of the Comprehensive Employment and Training Act, and because of the involved channels of organi- zation through which he must operate, it is difficult for the Director of the Veterans' Employment Service to maintain the necessary direction and control of these significant programs; and WHEREAS, Legislation has been introduced in Congress to provide for a separate agency within the Department of Labor to be known as the Veterans' Employment Service, and to authorize the appointment of an Assistant Secretary of Labor for Veterans' Employment; and for other purposes; and PAGENO="0442" 3062 -2- WHEREAS, Various individuals and groups have indicated their willingness to compromise by accepting a Deputy Assistant Secretary of Labor or a Deputy Assistant Undersecretary of Labor for Veterans' Employment in lieu of a full Assistant Secretary, which is contrary to the purpose and intent of the established position of The American Legion; now, therefore, be it RESOLVED, By the National Executive Committee of The American Legion in regular meeting assembled in Indianapolis, Indiana, on May 5-6, 1976, that The American Legion support legislation, or an executive order, and/or any and all administrative efforts to establish a full Assistant Secretary of Labor for Veterans' Employment and to establish the Veterans Employment Service as a separate agency within the United States Department of Labor; and be it further RESOLVED, That The American Legion, both legislatively and administratively, oppose the establishment of any such position at a level lower than Assistant Secretary. PAGENO="0443" 3063 THE WALL STREET JOURNAL, Tuenday, May ii, 1976 A atulyaf )qnlIymeut office, In 2) cltlee ~ `* - `~ ~ E-Iuntzng tor Work h l~ ~ ~ ~ ~ ~ ~ ~w tet~ U S Job Agulcy Fiiid.s ~ 1 ~:. ~ `~ ~ ~he ~ ~ i ~ pnaelly would attract beftcr-aktited and It a Hard Job to Boost ~ p iii ly pwmlnr~ they an * TX 1 ` 11 11 . T) 1 nd Tratntng Almlntntratlan aver-or-en and tine Ilnalvantaged but prIvately they -Its vv nite-'...~uitai i'e.uie banhrnlin out of a penal anplayer-nup. Itnled that better rfttclencyla tinging work. parted fund Is grawlrg en Copilot lulL A era might helt win tlSf~it the bigger budget Houne nubenennille, began onorelgit lie;tr- It sr-nato. The belenmuch burmuicrrcy wan to ~Most Firms Still Evade Rule thgn~usES~uunw~thgt~ `rn Be Listed r-~tteo thin month. hlnreover.n bra-cl italy firl *lubor eachange" wiwee companies I Ia petuing~ . of the egenry. dun to he tuned by Ihe Chel. mIght nina find accauntO., e~ivertlalng * At Employment Service ~ July could ~; a ==~ve. latereteca., - - `5kb Orgualnottoon : with company per-weasel officer, and Eon- One Woe: Links to Welfare ~ - . pnrlmeut alacty lint etreerihea lie Emptoy. lags lIsted wiSe tie USES In pre-rerennion 13 0 C S ~3 Miio.1st meat Service an a sick orgocdun:lneu in lineal 1071 Were dlrectlylrcceabie to the jab. ~ W u. S-react jar-snot, : mr-p trouble" deoplte tire tripling of Its hal- toting -ut.. The Labor Department enS. Son/I e~o.' moo; `get In the pant 1cr-ole, `ff USES Were truly males only "ba-terra are-third aol non. A faded blue nl:lrt mt;ar rotten neat to a. llectlee" the Cangrenomon declares. hair' of cit employer-n ore complyIng with ota.c'cicect white one an a hue latle : `trncpiuy;rz wecald be ruing tin froe servIces the nile: II rant br- mare spa-elite since It TOte eye-c.ntcltog phulai.'rnich decorates, lcolend of pr-tune employment agencies Innt even cure huw or-ny federal cnntrnc. the cover of a glossy brno,hnror denigned to- bib tin fees averaging OntO per place'-.. torn the rite sffeclo, persuade Wtcanncin- enrplnycrn that lice ni.' . ,.-. At l'lttnbnrgh-lcc.cel Ructwelt. lotern*. arnIe's publIc employment oilmen. leng colt.: Rut USES chief William It. fr-win sern hoar-I Corp.. for exanalte, Insiders concede ~lderdd etrtctly a uenrne at blccn-c-ellar labor- It abel. Ito n-or-es the agency tie induntrial seal aeranpace company ant ceo, cnn hello locate neon' highly ntdl!eol: will `bite toil acollahlejole epeolnge as the-. llcllccg all the requIred Jr-tee. Rockwell lInde whl:e-catlar cmployen. lsoa Tire opttee) batons uplnni drcelnpa "reel pat mute and the collect lao leer-by, lower-er. to turns onatoep the pitch: "New ito warier leo lInda 010cr pr-plc In na-cork.' lie agency e::ys ha- er-fir-tally. So do `sn. ether bIg rot-parota perfect fit when you're slapping fnrnnete gncl to In "ioerea.oc ike luactna-llen of Job emptovero. Xcrn-t Corp.. Stamford. Cr-no.. empiuve.' teperclcc~n reeled in crcfeaciiocctl aol incus..- -a-foams In 011cr-hose low mr-ny openings It Br-i the U.lt. Eml:teysseot Services 0a-t ga-riot ned otter while.eeltar eel utittoad - bed tool year ooot hare maaj' were holed war-It el 2,400 stale-or-ca plthllc eenlcinyoeent. Irate or-mapallona or-c-h year" lhrocgh iRS:. vllh USES, offi,nes. whIch tar-loin tin' Winconaho 01w);.: Icorrently Jecat 772 of ta- jab lintla-go ccli for Drlrolt-toanecl flurro;gmon Coo-p.o PilIr-. tins tad tie ho-a-tore, net even) In ntcrnl Is "ltrtcfenoiocaio." * - bcrryh eftlee ho-n inca "in fill compliance' b!oe'eollar Image, Nationwide, fur cut f, Yet sun genie have repe.'oletily et:ted~ wttto lire regsl.'tlioa ecdy etnre innt A::gr-ont, a flee Jobs helen) whlh the elate offices stIll .11 the agency whit-h na-as created `to laa3 to n:anagrr there nays, That wits ti. dr-to, he ow Ieee-chilled ta-no-leers. The average Wacooo-. help the Unemployed fbI John. I,huj ~ eaplel~ c* w)dctn .r- fr-dr-rat efflelorl paid a to a hoot'ly 02.70 on hour. * tryte~ fur flee yrara In wuo-.rmpinyees. visIt ho go over the':°,a'o `tot dont'c~' of the 1-'.ar ft-sn, enpteil:car- 11w ne-ft-a- nc'rcinra - Icr-nd ccli by its tale-l00ln ott-cr-n ccc retiring mncr-d:ntury-lir-linga p:-rgraco. Simple letting lire tOO-nclltion-a-yeac *Ic;:....cur-ct `.y'ctvmln poor toll cntr-orlly wa-rtern. I:: ltctn `fr-cr-I, it contnoctarn tltcr-~a OtcIut lint Jots `hanoi bees fill hlgtcen--lc-nylccz paSse-ca, no-I c.ccccillascv. has hr-rn h:cccr-pceeecl icy the fret tlc.nt mn/I lie ga-eat, acts anctiug tact-ens thai many I II h I e'.l atpl y no peanut I I In 1 ~ ltw~ht It I 0 f I I r- t itt. ~t Ii art I If re p1 1 ut rtgl e~' Cl leo H mttlon dl tn t m a g I h in th ~ y t C A I cc Up m I I Fop ymrn Servi `e I I-i 10 gh `o'pI m o~oc as a °~tt er-Irs-ret I m Is, A I t I p1 a-c o. log they wi. t t wr P hi lb er-a gripe - while prirately dual wrt:ct Is. lIne Ihe P'.mldnyooeei ,Service mocodatory jab-iinllg role Ii esotly er-ar-ted. U t th - -racy mold inquire a hr-macme they Hitch ltnJcttt a hod el welfare flenpr-stnlblhtiy for enforcing It rests with led. `70g Soothe I flame en th I hIrl g f pt 1 wlec Ily k t `n it ta-h *te~o;:: lpnli~*l~1r-~~ gil I i~,t un. waruas neal 0 tsry all lIttle . `` empicoymrnt :llacrleninaiias on the hnuin of 0 tesl l,talmnce - - TIte ullecupt In ga-I eoclclctyers lx axe. rn-c or nec, ilturecceer. o!fi'tols In the Cm- "We oen'on:tlly do onto IL-a a ttcgh percent- tYSln70 hue I:rgt'ly ceccic-orl en the 1171 cr-ea-~ plnymeoti Sereiro's field affires are eec- s~c of Jabo wIU, lIce conic t-mlclroyOtect nerO - ulireerder lrnor-ooo.in gon~rocnrotl;cl sir-rIco. Lxi Ia ncl;np at lie rut-parole hantin that tsr-s -ni,'a-o ocnieen Ihey're clerical," rc.nreclen one oatl:e "nl:cndt:tlory liallogs o-ttte. Originally tha-on even a few Jot openings, ~-s-retr-cccnei ear-cotter for a lag Mi'tcsevtrro ic' llnaed lu a J;cha-lor-a'etcsr-ccs hire, lIce rc:le `itar-tetlmeoym,'ro aokecl In thsear-:rne of dust i I rn nih 7 I I ae 1 olIh f I nit I I fIlm II so I I wi II tr,ncte. "Rut tlact't opncte me. for Coin vatre, wan wore Itt-to 010.1)10 must hot all Jolen - lInt Jctla'o r-a-llh 11cr slate eocploymeni orrrit-e. ointne It's agroloot tIer lana-," lte;cncelole. a ~ v.,.. *.. ss.,..a. ~n )am cay, `Yell, I 1,'" rel,'ntruene per. - Wlue:nnoico offiecol gvlpmu. "Wet-:' gil lisle' ` eccnnel flacrotrnger for on t;ciccntrtal cong/amer.' saodu of peuidr loitittg ftc cr-n-k Ilcot we * - - air, "Tlceoo yns ilat a foe-enough in beep I con'I J.lla; fur ben-nun eouloloyern oren t - `~ gals oat of troubto." - ~. t:anmexhioeiehs,"_ , *.,,__it, `~` PAGENO="0444" 3064 f~f~'tny,rs elton 1JOP~O for varhnto rra* sties. Many dir i,oveoorraiic effirtrn,lrn. `The lAbor Department boeett thtt about Otto soyo plre~ job ortlrr with the Mete, I f'.'4 of the employers end jobnechere uning ounploymeat eftke yieldn a 4e1u~e of time- ~,~mp1vynrit ~ sw estief led with vfint phone ralu Irons different el.tt fern. ___________________________ A.'tothrrprolenie referrals of "the drr'n." sir usquifitieti j'tbeeehrre, Also many employ- the mid they received, according to the study ~n overetty fear dint etching USES refer- bring reb,ooed todey. But the cIndy shows T-nts sf11 rop-me thrm to more prenoitre ~ that the Employment Service in conoulted the feunnirs ant minority-groups mitero. durIng any given ported by only about 22% "The a~rnr~- Orototo thot cli hiring tiectetorm of employers mind 29% of jobneekrrs `es a sic up to the emplnyer,f pert of their recruitment and job-search an' `Turning' to the ~~ettnmeat syotem for ttvttteL" The study, conducted for the do' skilled seekers ~lten in futile, employers partment by is Philadelphia consulting firm, rsvitenti. Wroninchinino £lertrtc Corp.'o on- is boned on interviews with abuut 000 em' clear Cnmpnetenteoioot to Chrewtrk, Pa., ~ ployera end 2,000 jaboeebcro during Ut. lost trntiyttuted*eftii!ed weitier's job and ilido's huh *11974. got soy referrals, according to is peroonorl But gatos to the white-cotter sector tn' clots. Herbert Ettotsie. "We got three by rtn.'tis *101100. `Sits Employment Manage- pfstg 10 aweldiog echoof." he says. mciii Aeuottatios.~a cotetlif og finn biound ha Sloe-eon-er, employer, frequently find am Weotorn, Mono., found tn is 1974 survey of 420 i~e nutebes-s revs of oltilied joborehora employers thot 701. hnittt't titled a single profeuniosat pouttion throagh USES. * - hengung on their doors without toy agency's `_~- t.ip-eeinrcfalhy in bar-I times. It's enS' ` wated tied 7ilblic ansi prirate ogencieu to- Job 1lgeiwi's Ineptitude PThtrfftteniyoaeeutoueeeusjnhopen~ Turns Off Workers Too- `wnrdof-mtso'ls reports of visowoelers sod OyO Watt Stoner doer-rn. 0b*f~Rspeettr PITTSULIRGII-It tuft only employ' Eager Per a fare-lift, USES wilt is-tend en who Often sire turned off by the bit" rosily $1 million thin year tn a cootinutog reoucrutic Ineptitude *1 oteto employ- moinpatgts tonefoohion ito image througt ta- ment agencies. Sonic joboecisers bare r~Oo. televieton stud point ails. "We're rompu- the same reaction. »=n'tzed, but pecnnnuiized." enthunen one TV Otto man who.receoilynwitchtd Item ~sr-oO. Fetierkl e'.affero prod many stales fit a uL'nte agency to theprieztie concerns is `thenge theIr aguncios' come to "Sob Ser- l)ssn'td RoMe, a 21-year-old University uo'.ooi" Vet tome states h'snetn't ncteti-witiciu of Pittsburgh graduate t.ith a liberal ~uieetitt,s The foci that goveroor-oppotnteth `stein degree atM buitding.rrpair expert' mule' agency leads can largely n-uo their once. - sent ohown Irs-n- of feclerni "mruluiiing." lift. Rohds recuflu going to tbo* To other tr.nn'eo, a thvee'year'atd "Sub "profeesional" room of the downtown Serrice tn:yras-etnret peogroen" han brett utute employment office, where the btosched its 32otaivs no fur. Loetnt violin ore biintls are drawn even at noon, and sit' tienignfssing "COtoont eisecntirrs" tn pert's- tioc coattail waiting fur three hours. AS' nib as-rn-tees to compenien. Employer tee he hod born interviewed twice, a, ,~sdvtsneye' cotanllnees art oprioging up in third staffer snapped at him, "Whet are ~*tsensnoI tosonatn get utoflera mingling with you doing here? We bone a utuft mrnt- .wsspatsy peenncnnnl shin-ore. Signtiicrtntiy, tog *1 four o'clock," ~e formula toted to dirty up the festered Unitnunied, itti. labile reiornod an' feats e.'eosig tIer ointeo feet year was `other day, and we~tt thrnngh the whole -~oged Its in-he-ct indiridool ntateo' place. rigmaroie alt over sgoio-oesiyto be toid teot fteefcvan.'nowr. Anot s-otto. weight is thr.t the twO job npenlngn he had us' gives for pbselooepenpiotobviterloba. `tectod. lens the coteputsotood "job `Tet The go.tto of the Empioyrnent Pen-rice beets" were elrroalytiiied. acen~t cheer s-ceo to conic invitirro. OVitliam - Otnhberg, Ansintoot Secretory of Labor for ;Maopon'er, lte.n noted tiu,tt USES nyc-den `cot eaSy nader the outitorielog OV:ugcor' -Thyner .trtoil 20,33. but nina under ntt~o.iatrs nt.montng trues 21 other pieces of fgtlerui egielntlaet, 1 eoerutiee orders, 19 orrno-0o~ Osetsi.s si-ith other ie-derel anti ntate agencies and turn intel or-tern." A diegrvotlrd Plan-. ~2ta s.grnry oltielol pole it more blootty: 1rm enppoas'd to give peelerrnce to corey. tote, cues-pt tOts- swung. chile eno.to-uoieno or tuupprnsn taken migrant ocnrker." ; Ops-ratinte' err tropeet-ing in cows `rfontnu-ne. Sronrt~e Pacific Plntioeot Bach in ~:.n ,tsn~rlen o-rpcutn a "treusuenoivue" in. to ito jet tvitteg-t wiih USES door in- ~cni nllirintn i"-ty-torttioeo-lng the ntatttttt'cy rote its 1013. "A lot 01 truck had to be ~deoe to get ten to comply" fitly toStu itt a founts rnrruullrr u'aonrsiro.t TOw book tn tn ptea.seet with USES. ft bird Its `.ent ectt-y-bt-u-rt ttuc:togcuaeci rntployeo ~"~c'ugh (tie onn-rks---eio its nil-lost year. Bitt crest Foes of USES Are Pi'iwtc competitors 8e'sWot.t, Sounier bonsai. Sin/f Rc~tartet' Despite all the woes of the us: Cot' ptnynnent ServO-n, fear ct the agocoy still Is eeisis-u:t oosong name slits tither- eat oppouentas mouy of tue nation's more thin 19.000 private eosployaient sgrnciro. - - Alarmed by a 71- its-dine to theIr raoits font year. private agencies sire - fighting nra-oral pendIng bum to Coo' greea'-tnelmuiiing propesastn fist ntond.n. tory tinting of all jabs with ISlES-that would atrrf~gthen the gonernmvnt sys' tens, Apparently seeking ameumsnltiout. Drntech, Shea di llamas Inc., a New York recruiureent-auicrrliaieg and rout- euittng coorrint, potted 214 ct'n:paoy personnel enrcuuuicrs and soeemoocrd that 75% optio,ed enpstecioo cf USES powers. - . Bul Employment Service esftciats pooh'pcoh private ogeutciee' fees of goyeromrnt "cotoprtitkvu." They argue thot there In t-vmvnu for both iso play big. ger rates in he toter macbet, PAGENO="0445" 3065 The Honorable Vance Hartke Chairman Committee on Veterans' Affairs United State Senate Washington, D.C. 20510 Dear Senator Hartke: As requested in your letter dated July 7, 1976, I am pleased to offer the attached comments of the Disabled American Veterans on S-969 (asamended on 7/2/76), The Veterans' Education and Employment Assistance Act of 1976. As a preface to the attached remarks, it should be first noted that the primary aim of the Disabled American Veterans is to promote the welfare and interests of America's service-connected war-time disabled veterans, their dependents and survivors. Our legislative activities, therefore, are focused primarily on those Federal veterans programs which have as a portion of their eligibility criteria, the incurrence of a service-related wound, injury or disease. Generally speaking, DAV takes no official position on legislation which relates to veterans benefits that are non- service-connected" in nature, that is, benefits the eligibility to which simply carries the prerequisite of a specified period of active military service and an honorable discharge. However, the DAV will oppose such legislation if it is evident that its enactment would impede or detract from securing needed improvements in the Federal benefits of our war-time service-connected disabled. I trust this brief description of DAV legislative priorities will place in proper perspective our comments -- or lack of comments -- on the various provisions of the 1976 Education and Employment Assistance Act. Sincerely yours, ~I&4 ~ CHARLES L. HUBER National Director of Legislation NATIONAL SERVICE HEADQUARTERS WILLIAM J. FLAHERTY 807 MAINE AVENUE, SW. WASHINGTON, D.C. 20024 ASSISTANT DIRECTORS 202 554-3501 WILLIAM B. GARDINER JOHN F. HEILMAN SAMUEL S. MICHAELS. JR. July 20, 1976 CLH/dr Attachment PAGENO="0446" 3066 VIEWS OF THE DISABLED AMERICAN VETERANS ON 5-969 THE VETERANS' EDUCATION AND EMPLOYMENT ACT OF 1976 Title I This portion of the Bill concerns the VA's Vocational Rehabilitation Program (Chapter 31, Title 38, U.S. Code) and contains the following sections: Section 101 would authorize, effective 10/1/76, an 8% increase in the monthly subsistence allowance rates of disabled veteran trainees. Section 102 would provide that Chapter 31 benefits can be extended at any time after the normal eligibility period cut-off date (9 years following discharge) if the VA Administrator determines that a veteran's service connected disability has rendered him unemployable and in need of vocational rehabilitation. Section 103 would permit service-connected disabled veterans to receive vocational rehabilitation training in Federal Agencies of the U.S. Government. The DAV supports this increase in Chapter 31 benefit rates. These allowances were last adjusted two years ago by Public Law 93-508. Since that time, inflation has increased the cost of goods and services in this country by almost 15 percent. Obviously, the 24,500 disabled veterans currently receiving vocational rehabilitation training are in need of the financial relief proposed by s-969. The elimination of any final termination date for vocational rehabilitation training would. satisfy a DAV National Convention Mandate (Resolution No. 268). In our opinion, the current maximum Chapter 31 cut-off date -- not beyond ten years after the normal termination date or 6/30/75, whichever is later -- is unarniable to the basic philosophy of the Vocational Rehabilitation Program. This philosophy is to provide training to a veteran who has need of such training due to a service-connected disability. It therefore matters not whether such need arises 1, 5 or 20 years following service discharge. Over one thousand disabled veterans in training had their Chapter 31 benefits terminated on June 30, 1975. These veterans were forced to PAGENO="0447" 3067 -2- either cease training or, if possible, assume the financial burden themselves at great personal and family sacrifice. Simple justice requires that their benefit entitlement be restored to them. I might add that the Veterans Administration has submitted a favorable report on this proposed liberalization of current law. Authorizing vocational rehabilitation training by disabled veterans in Federal Agencies would greatly expand their employment opportunities and place them on parity with trainees employed by the Federal government under the Rehabilitation Act of 1973. We therefore support this section of S-969. Title II This portion of the Bill concerns educational benefits authorized by Chapter 34, Title 38, U.S. Code and, of its several sections, the DAV would comment on the following: Section 201 would authorize, effective 10/1/76, an 8% increase in educational and tutorial assistance allowances. Section 203 would provide (a) that a maximum amount of 45 months of GI Bill training be extended for approved programs of education in both undergraduate and post-graduate studies and (b) that maximum Chapter 34 benefits would be extended to veterans who served less than 18 months on active duty and received a medical discharge because of a service- connected disability. Though the DAV has no National Convention mandate calling for an increase in Chapter 34 educational assistance allowances, if the program is to remain viable for those war-time-era veterans who have already earned benefit entitlement, them rates must be upwardly adjusted. We also have no official position on allowing the extra nine months of Chapter 34 training authorized by PL-93-508 to be used for post-graduate work. However we do view this liberalization as a logical and reasonable benefit extension. The DAV strongly supports maximum Chapter 34 entitlement for veterans of less than 18 months of military service who were medically discharged due to a service-connected disability. In our opinion, any veteran whose military service was abruptly terminated by reason of a disability incurred in line of duty should be given special consideration. In this instance, the veteran's inability to serve out his full term of active duty -- and thereby gain full entitlement to Chapter 34 benefits -- was due to circumstances beyond his control, namely, his Service-incurred disease or injury. PAGENO="0448" 3068 -3- Title III These provisions of the Bill concern dependents and survivors educational assistance under Chapter 35, Title 38, U.S. Code and contains the following sections. Section 301 would authorize, effective 10/1/76, an 8% increase in-Chapter 35 educational assistance allowances.~ Section 303 would extend the maximum educational entitlement under Chapter 35 benefits from 36 months to 45 months. Section 304 would extend the eligibility period applicable - to children in training under Chapter 35 assistance from five years to eight years following the date of the veteran's service-connected death or following the date of the total and permanent disability determination made by the VA The DAV supports the proposed rate adjustment in Chapter 35 - - benefits- for reasons identical to those previously expressed in discussion of Chapter 31 benefit adjustments. We also support a nine month increase in Chapter 35 educational entitlement, for it places these widows and children on a parity basis with those in training under Chapter 34 benefits. The DAV supports a three year extention in the Chapter 35 eligibility period for children of deceased or totally - disablèd service-connected veterans. Educational pursuits in today's world are characterized by (1) a greater need for post-graduate studies and (2) higher educational costs which lead to a less than full-time study and part-time or full- time job relationship. This proposed extension is both a reasonable and necessary response to our country's lengthy educational process. Title IV This portion of S-969 contains sections 401 through 407 which propose the following major changes: (1) The establishment of 12/31/76 as the termination -; - date for gaining eligibility to educational benefits under Chapter 34, Title 38, U.S. Code. (2) The establishment of a new "cost sharing" VA educational program for veterans entering active military on or after January 1, 1977. (3) provides that in the event universal military service (the draft) is reimposed, those entering service after this draft reinstatement would be eligible for educational benefits under Chapter 34, Title 38, U.S. Code. PAGENO="0449" 3069 -4- The DAy, as mandated by the delegates to our most recent National Convention, supports termination of the current GI Bill program. You may recall the DAV so testified during hearings conducted last October by the Senate Subcommittee on Readjustment, Education and Employment. Vietnam-era Chapter 34 benefits, as the similar programs of WWI1 and Korea, were created by the Congress for the purpose of restoring lost or postponed educational advancement opportunities to veterans who were inducted into military service during a war-time era. However, today the United States is no longer at war and those entering military service are now volunteers, not draftees. The current GI Bill program has achieved the goals for which it was created and, as were the programs of WWII and Korea, should be terminated. The billions upon billions of Federal dollars no longer necessary to "indefinitely" fund this program could be saved or well used in other areas, most notably in providing needed improvements in the benefits of our war-time disabled. The premise upon which our support for termination of VA Chapter 34 educational benefits is based necessitates our opposition to that portion of S-969 which proposes to create a program of VA educational benefits for peace-time, non-disabled veterans of our now volunteer Army. The !DAV can well understand the reluctance on the part of Congress to "discontinue" a veterans program without offering something in return. But as pointed out above, there is a precedent for this -- WWII and Korea GI Bill benefits were terminated. We find it completely paradoxical and at cross purposes that S-969 proposes to terminate VA educational benefits for peace-tine, able-bodied veterans and, at the same time, proposes to create VA educational benefits for this same category of veterans. And, less we deceive ourselves, it must be stated that though the proposed program is given a new name and placed on a VA/veteran cost-sharing basis, it is in essence simply. a less costly continuation of Chapter 34 benefits. And the cost, though decreased, is still very substantial. Chapter 34 benefits, under the current program, are estimated to require $4.6 Billion during Fiscal Year 1977 for some 2.7 million veterans in training. The VA'S cost for maximum bemef it entitlement under the mew proposed program for this same number of veterans, which admittedly (though not likely) could be spread out over a ten year period, would be $14.7 Billion. We must also comment on that portion of the Bill's language (in Section 404) which states that this mew program is intended to promote and assist the all volunteer military program of the United States by attracting qualified men and women to serve im the Armed Forces." The VA is not and should not be required to fund costly `recruitment incentives" for our military. That is the responsibility of the Department of Defense. Any educational program based on this premise should be funded by the DOD. 78.226 0-77-29 (PL4) . PAGENO="0450" 3070 -5- The DAV therefore opposes the initiation of any new educational program for peace-time, able-bodied veterans of volunteer forces if it is to be funded through VA appropriations. We also do not think it necessary or advisable to at this time statutorily require the reavailability of Chapter 34 entitlement to future veterans, should universal military service be reinposed by law. Our government has reinstituted GI Bill benefits twice in the past when it felt circumstances warranted such action. No doubt similar actions would be contemplated and taken in the future if required. We feel this decision, based on events that have yet to occur, should not be preemptively made by the current Congress but left to future legislators who will be serving this country when and if these events occur. L Title VI This portion of the Bill concerns the Veterans Employment Assistance Provisions contained in Title 38, U.S. Code. The DAV strongly supports section 601 of the Bill which proposes to elevate the Director of the Veterans Employment Service to an Assistant Secretary of Labor status within the Department of Labor. Our organization has long felt that such action is necessary if the VES Director is to effectively promote employment opportunities for veterans, especially for disabled veterans. In this same interest to provide maximum Federal/private employment rights and opportunities for both disabled and non-disabled veterans, the DAV suggests the following amendments to Title VI of S-969. (1) Section 602 provides a new clause (Number 6) in Section 2003 of Chapter 41, Title 38, U.S. Code. In this new clause (6) add the words "especially disabled veterans". after the words "veteran" and "eligible veterans." (2) Amend Section 2012(a) of Chapter 42, Title 38, U.S. Code as follows: A. Delete the words "in the amount of $10,000" and insert in lieu thereof the words "including national security and defense contracts and Federally assisted contracts in the amount of $2,500." B. After the sentence ending in the words "veterans of~the Vietnam-era" and before the sentence beginning "The provisions of this section" insert the following three sentences: "Prior to awarding any contract, the contracting agency will conduct a pre-award compliance review to assure compliance PAGENO="0451" 3071 -6- with this section. Subsequent to the awarding of any contract, the contracting agency will conduct a post-comp1j~nce review to assure conpijance with these provisions. All such pre- and post- compliance activities will be reported to the Secretary of Labor." C. Strike the period following the words "such employment openings' and insert in lieu thereof the words "and advise all veterans referred to such openings of their rights to file a complaint as provided for in Section 2012(b)." (3) In Section 2014 of Chapter 42, Title 38, U. S. Code redesignate paragraphs (d), Ce) and (f) as paragraphs (e), (f) and (g) and insert the following new language as paragraph Cd) "If any disabled veteran or veteran of the Vietnain-~a believes that any Department, Agency or instrumentality in the Executive Branch (including the United States Postal Service and Postal Rate Commission) has failed to comply with affirmative actions or has been discriminated against because of a service-connected disability, relating to their employment and job advancement opportunities within the Federal Government, such veteran may file a complaint with the Chairman, Civil Service Commission. The Chairman, Civil Service Commission, shall issue appropriate regulations within 60 days of enactment of this Section which will establish a separate and distinct appeal process available to qualified disabled and Vietnam-era veterans. This complaint procedure shall be separate from any existing complaint procedure available to existing employees." PAGENO="0452" 3072 UN1VeRSA1~ TRAlNlN~ SE1W1CE 1NC~ 1501 N.W. 7 STREET* MIAMI, FLORIDA 33125 July 20, 1976 Senator Vance Hartke United States Senate Washington, D.C. 20510 RE: VETERANS EDUCATION AND EMPLOYMENT ASSISTANCE ACT. S.969 AMENDMENT NO. 2005 Dear Senator Hartke: I have enclosed herewith, comments submitted by Universal Training Service, relative to the above mentioned act. I believe you and the Senate Veterans Affairs Committee have done an outstanding job throughout the years on behalf of all veterans. Accordingly, there are three areas of particular interest to our school in the proposed Act and I trust our comments will be distributed to all committee members as well as made part of the cormiiittee's official education hearing record. I commend your fine effort in providing our nation's veterans with the utmost in educational and employment assistance. Sincerely, UNIVE1~SAL TRAINING SERVICE,INC. :~ / ,~E. M~SwiggatY, Jr. president / EMcS:map End. PAGENO="0453" 3073 [~1 UNIVeRSAL TRAINING SERViCE iNC. -l - 1501 NW. 7 STREET. MIAMI, FLORIDA 33125 VETERANS EDUCATION AND EMPLOYMENT ASSISTANCE ACT S.969 AMENDMENT NO. 2005 COMMENTS SUBMITTED BY: UNIVERSAL TRAINING SERVICE,INCS 1901 N.W. 7th Street Miami, Florida 33125 1. TITLE IV - POST VIETNAM ERA VET,ERANS'RE-ADJUSTMENT ASSISTANCE ACT. SUBCHAPTER III - Entitlement; Duration 1631. Entitlement; Loan Eligibility SECTION (2) PARA. (3) Payment of benefits under this chapter may be made only after an eligible veteran has been discharged or released from active duty and only for such periods of time during which the eligible veteran is actually enrolled in and pursuing an approved program of education. Benefits payable under this chapter may not be assigned. OPINION: This provision would deny the servicemen the opportunity to use his benefits prior to his formal discharge. Our school experience shows many in-service personnel want to begin earning a living immediately after their separation from service. He or she is anxious to get a head start on their future. Since our school offers a combination correspondence/resident training program, many servicemen begin their training by correspondence during the last few months of active duty Upon separation from service, they immediately come into the resident training, which is offered year-round. Aftet a few months of intensive practical training, they are ready for full time employment and become taxpayers. We believe Section (a) Para. (3) should be deleted from this act or amended asfollows: Payment of benefits under this chapter may be made only after an eligible servicemen has six months or less remaining active duty time. The eligible servicemen must enroll in and pursue only an approved program of education. 2. TITLE V - CHAPTER 36 EDUCATION LOAN AND PROGRAM ADMINISTRATION AMENDMENTS. SECTION 505 PARA.(5) To any eligible veteran or person for pursuit of the corres- pondence portion of a combination correspondence-residence course leading to a vocational objectives if the correspondence portion is completed in less than 6 months. OPINION: The true advantage of correspondence education is to allow the individual student to study at his own speed. PAGENO="0454" 3074 ~JJ UNiVERSAL TRA1N1N~ SERViCE INC. -2- 1Q01 NW. 7 STREET. MIAMI, FLORIDA 33125 OPINION: Each student progresses at his own pace~ By arbitrarily imposing a certain minimum time element on completion, it will in effect take away the real benefit and worth- while purpose of study. After reviewing and recording thousands of our students' progress throughout the last 30 years, our analysis depicts each student as an unique individual whose study habits vary depending on educational background, en- vironment and motivation. To restrict this type of student would take away the primary reason for his/her enrolling in any program. Our studies conclude that some students take up to two (2) years to complete the correspondence portion of our course, while others who are more eager and ready to learn may take 4-5 months~ Let's not penalize the serious minded student who wants to get ahead in life. We believe Section (505) Para (5) should be amended as follows: "To any eligible veteran or person for pursuit of the correspondence portion of a combination correspondence- resident course leading to a vocational objectives if the averag~ student completion time of the correspondence portion is less than 6 months. 3. TITLE VII - MISCELLANEOUS AND EFFECTIVE DATE SECTION (701): SECTION 3101 (a) of Title 38, United States Code, is Amended by adding at the end thereof the following: "For the purposes of this subsection, in any case where a payee of an educational assistance allowance has designated the address of an attorney-in-fact as the payee's address for the purpose of receiving his or her benefit check and has also executed a Power of Attorney giving the Attorney- in-fact authority to negotiate such benefit check, such action shall be deemed to be an assignment and is prohibited" OPINION The paramount purposeof Amendment 2005 is to provide more adequate educational and employment assistance for our nation's veterans. It is also intended to prevent or reduce abuses under the G.I.Bill program. Due to an alarming increase in overpayments by the VA it is corsmiendable that provisions be written into the law to curb such practices. However, by prohibiting the assignment of a veterans' benefit check to an authorized attorney-in-fact, it will indeed encourage some veterans to take financial advantage of both the veterans administration and the instit- ution they attend, either college or vocational school. PAGENO="0455" 3075 ___ 1~J UN1V~RSAL TRA1N1N~ SQRV1CE INC. 1901 NW. 7 STREET. MIAMI, FLORIDA 33125 -3- EXECUTIVE OFFICES OPINION Our method of instruction is a proven success. By combining correspondence with resident training we achieve the best of both educational functions. But before a student can be admitted to the residency portion of the program, he must have completed and paid for his correspondence lessons. Our past school experiences indicates that many veterans who were en- rolled, mysteriously "dropped out", soon after receiving their benefit check for correspondence lessons. The reason is obvious, they were using VA educational monies for personal uses. This practice was widespread prior to Administrators Decision, Veterans' Administration No.993 issued December 6, 1972. This decision clearly states that the V A. is without authority to withhold benefit payment checks drawn in favor of its benefic- iaries merely on the basis that the beneficiary has attempted to assign such benefits. When a veteran assigns his benefits to an Attorney-in-Fact for correspondence education, the V.A is automatically assured there will be no overpayments. This is because the school is only paid for lessons the veteran has actually completed This insures that the benefit check is used for educational purposes and non other. We believe section (701) should be amended to read: "For the purpose of this subsection, any payee of an educational assistance allowance has the right to designate the address of an Attorney-in-Fact as the payee's address for the purpose of receiving his or her benefit check and has the right to execute a Power of Attorney giving the Attorney-in-Fact the authority to negotiate such benefit check, such action shall be deemed to be an assignmentS" (OR) For the purposes of this subsection, in any case where a payee of an educational assistance allowance has designated the address of an Attorney-in-Fact as the payees address for the purpose of receiving his or her benefit check and has also executed a Power of Attorney giving the Attorney-in-Fact authority to negotiate such benefit check, such action shall be deemed an assignment and is prohibited if the educational institution has more than 85 percent of its students assigning their benefits. PAGENO="0456" 3076 paralyzed veterans of america ~f%a~1en~ed I,~c Qhuied ~a~ ~fcnress - 7315 Wisconsin Ave., Suite 300W, Washington, D.C. 20014, (301) 652.2133 Statement of Lawrence W. Roffee, Jr., Legislative Director Paralyzed Veterans of America to the Senate Committee on Veterans Affairs Subcommittee on Reisdjustment, Education, and Employment on Amendoent No. 2005 to S. 969 The Veterans Education and Employment Assistance Act July 22, 1976 Mr. Chairman, the Paralyzed Veterans of America appreciates this opportunity to. comment on Amendment No. 2005, a substitute amendment to S. 969, The Veterans Education and Employment Assistance Act of 1976. This amendment is once again testimony to the dedication yourself, this committee, and its staff all have to veterans. First of all, PVA feels that the 8% cost-of-living increase proposed for education and training benefits under Chapters 31, 34 and 35 of Title 38 is equitable. We do wish it could be higher, however we realize we are all functioning under pres- sure to keep Federal spending down, and must remain within the target level of spending for Veterans Benefits and Services established in the First Concurrent Resolution on the Budget. Secondly, PVA has consistently opposed proposals to terminate education and train- * ing benefits for veterans discharged since the end of the Vietnam Era. We believe the advantages which accrue to the individual veteran, in terms of increased oppor- tunities, higher income, and greater self-esteem, from post secondary education or training, alone merit the continuation of a GI Bill. We also believe advan- tages accrue to societyas a whole from the veterans having increased education PAGENO="0457" 3077 levels. Not least important is the effect of an education entitlement as a recruitment incentive. It is also PVA's position that the current education entitlements, particularly those of Chapter 34, must be partially viewed as readjustment benefits for war- time veterans and draftees regardless of their period of service. We also realize, once again, the budgetary constraints the Committee is operating under. In view of all these above factors, PVA feels the Post-Vietnam Era Veterans Assistance Act as proposed in Title IV of the amendment is a very imaginative and feasible program to insure the continuation of education and training benefits for future veterans. The new program would seem to retain many of the advantages of the current program, yet drastically reduce the overall cost to the VA. The monetary commitment it requires from the veteran during his military service would seem to insure that the VA's dollars are indeed spent on education, and .notabused. The proposed program has PVA's wholehearted endorsement. As I am sure the Committee is aware, Paralyzed Veterans of America represents~ many of this nation's most catastrophically disabled veterans. Because of our injuries we all have come to realize the importance of readjustment, rehabilita- tion, and educational training. A spinal cord injury which confines a person to a wheelchair is a very traumatic experience requiring a long period of readjust- ment to an entirely new life style. Education and training are crucial to that rehabilitation and readjustment. Many times a veteran must plan an entirely new career or vocation that is within the limits of his disability. Additionally, the process of getting an education becomes an important factor in the readjust- ment of a catastrophically disabled veteran. He learns to accept himself, his injury, and his abilities as he interacts in the educational environment. PAGENO="0458" 3078 However, this entire rehabilitation process is a slow one. Catastrophically disabled veterans have spent an average of almost three (3) years in hospitals. Once they are discharged, they face many medical complications which require additional periods of hospitalization or being confined to their home. In short, we face many time consuming interruptions in our rehabilitation. This is time which cannot be spent in school or training. Mr. Chairman, the results of a survey of PVA's non-service connected members show, unfortunately, that this entire rehabilitation process is not leading to gainful employment for the vast majority of the catastrophically disabled veter- ans. Our figures show that 87% of these veterans are unemployed. The following table shows the reasons the veterans reported as to why they are unemployed: 1. Disability too severe 48.3% (707) 2. Would lose more by working at at full capacity than now re- 27.7% (406) ceive in benefits 3. Do not have the physical 13.0% (191) * tolerance 4. Other personal reasons 10.4% (153) 5. Do not want to work 0.05% ( 8 1 87% (l,~6~1 At the same time, 76%, or 1,105 of these unemployed veterans reported they would accept employment at a living wage if they had the opportunity to be trained at a job that is within the limits of their disability. Clearly, the majority of this group of veterans has a desire to return to work. In doing this there are two major barriers to remove. We must insure adequate time and guidance for the severely disabled veteran's education and retraining. And, we must reduce the discrimination in the employment of handicapped people. In light of our survey findings and these brief conclusions, there are several PAGENO="0459" 3079 provisions in the amendment to S. 969 which PVA enthusiastically supports. Section 104 of the amendment would remove the termination date of June 30, 1975 and the 10-year limit in Section 1503(c) of Title 38. This will be of great value to the service-connected catastrophically disabled veterans receiving voca- tional rehabilitation under Chapter 31. Section 204 of the amendment which ex- tends the time of the educational entitlement under Chapter 34 for periods when a veteran is prevented from completing his or her education program because of a physical or mental disability, will be of great value to the non-service- connected catastrophically disabled veterans. Three (3) years of hospitalization and frequent returns add up to significant chunks out of the 10-year eligibility period. PVA also endorses the extension of benefits from a 36 to 45 month period to include graduate studies. The survey findings on the disasterous unemployment rate of catastrophically dis- abled veterans are the basis of PVAs strong support of the provisions relating to employment of Title VI of the amendment. We believe creating the position of an Assistant Secretary of Labor for Veterans Employment is desirable and necessary. Our hope is that he be given, either by statute or regulation, the authority and capability to effectively do his job. We also strongly support the proposed amendment to Section 2012 of Title 38. It has long been PVA's position that the employment programs for the disabled and Vietnam veterans established in Sections 2012 and 2014 of Title 38, and Sections 501, 503 and 504 of the Vocational Rehabilitation Act of 1973 do not contain any effective enforcement measures. A strong grievance procedure is needed for cases of discrimination from Federal Government contractors and lack of good faith with the affirmative action programs in the Federal agencies. Requiring more detailed PAGENO="0460" 3080 reports on veterans complaints under Section 2012 (b) of Title 38 as proposed in Section 606 of Amendment No. 2005 is a welcome first step. We hope the Committee will closely monitor these reports, and if it appears the Federal con- tractors are not following the full intent of Congress, we hope this Committee will consider furtL. legislative changes. We also hope this Committee will continue to closely monitor the implementation of the recent regulations promulgated pursuant to provisions in the Vietnam Era Veterans Readjustment Assistance Act of 1974. If the Federal agencies do not establish effective Affirm~tie ~ction programs, we hope this Comitteewill again consider legislative ~hanges. There should be some effective way to enforce compliance with the Affirmative Action programs under Section 2014 of Title 38. If it appears necessary, we urge this Committee to consider establishing a griev- ance procedure similar to that in the Civil Rights Act of 1964 or that which is proposed for the Vocational Rehabilitation Act of 1973 in H.R. 13527. There are two additional changes in Section 2012 which PVA believes desirable, and hopes the Committee will include them in Amendment No. 2005. First of all, we believe it should be made clear that "any contractor" in Section 2012 (a) of Title 38 includes contractual work in the area of national security and defense. Secondly, we believe the minimum contract amount in Section 2012 (a) should be reduced from $10,000. to $2,700. This will broaden the coverage and parallel the Vocational Rehabilitation Act of 1973. Mr. Chairman, PVA is concerned about the recent abuses of the VA's educational benefits. We believe all parties, the student veterans, the school administra- tors and the VA must share parts of the blame. We do support the provisions in various sections of Amendment 2005 that are designed to prevent the abuses. Our concern is that some of the proposed changes could curtail the flexibility needed PAGENO="0461" 3081 in graduate education. We do not believe the abuses of the GI Bill have come from graduate students, and we hope the changes would not adversely effect them. Sections 207 and 307 of Amendment No. 2005 relate to the standards of progress towards a degree in Sections 1674 and 1724 of Title 38. We hope that the Committee will make it clear to the Administrator that obtaining a graduate degree is a slow process. Many times a student's progress is dependent upon when courses he needs are offered. We hope situations like this will be considered "mitigating circumstances". In relation to the new clause (4) added to Section 1780 (a) of Title 38, we hope the Administrator realizes that in graduate work some courses are necessary and required, yet the grade and credit does not go toward computing the requirements for the graduate degree. In summary, PVA believes the 8% cost-of-living increase is equitable. The ad- justments in the eligibility periods of Chapter 31 and 34 benefits will be very valuable to all severely disabled veterans where education is a key to their total rehabilitation. We also strongly endorse strengthening the employment pro- visions in Title 38 as they relate to disabled and Vietnam veterans. We believe the Post-Vietnam Era Veterans Readjustment Assistance Act is imaginative and feasible. It is obvious the Committee has studied the problems and needs of all veterans with respect to the education programs in Title 38. PVA appreciates your attentive ear and hard work. PAGENO="0462" 3082 OCOLte IONA COLLEGE NEW ROCHELLE, N. Y. 10801 \`F.TF'~ ~ f.~F?.'~ C~ July 22 1976 `~) Senator Vance Hartke `- Chairman Committee on Veterans Affairs United States Senate Washington, D.C. 20510 Dear Senator Hartke: As Veterans Counselor at lona College, New Rochelle, New York, I am re- sponding to your remarks in the Senate of July 2, 1976 as they pertain to the Veterans Education and Employment Assistance Act of 1976 (S.969). I am limiting my discussion to Title IV of the legislative proposals, i.e., to the Post-Vietnam Era veteran's Readjustment Assistance Act. Under present circumstances, the military service has a great need for highly qualified individuals. It is recognized that over the past few years the incentive of G.I. benefits has been a tremendous attraction in military recruiting. The need for some sort of post-military educa- tion benefit is desirable not alone from the perspective of military recruiting policies. From a broader social perspective the ability to acquire vertical mobility from one's military experience has been seen by political scientists as an asset of military life in all parts of the world, particularly in underdeveloped countries. But even in the United States there is much to be said for this. In the years after 1945 the G.I. Bill directly contributed to what would be called in Rostovian terms as the "take-off" in America's move toward post-industrial technology. The G.I. Bill for World War II veterans was the means by which large masses of individuals were able to move into the middle class style of life in the post-depression, post-war world. The Bill thereby enabled them to contribute to the social welfare to a far greater extent than would have been possible for them before this legislation came into ex- istence. The availability of veterans' education benefits has the advantage of increasing one's stake in society and in the future of one's self and in the Republic. In a time in which military service, because of the increased rates of pay, is looked upon as approaching mercenary status, the availability of such education benefits increases the social com- mitment of the individual in service. In contrast with the former G.I. Bill Legislation the proposed Chap- ter 32 is characterized by the individual's willingness to make a small sacrifice for the sake of larger future gains. To this extent, it con- forms with the traditional ideal of our Republic of the individual help- ing himself in order to get ahead. This new approach is perhaps needed PAGENO="0463" 3083 at a time when abuses within the G.I. Bill by veterans and even by in- stitutions of learning have led to Chapter 34 acquiring the reputation of being a welfare handout. Chapter 32 also conforms with the successful matching grant formula of recent Federal benefits legislation. It re- quires veterans to make sacrifice which in turn is added to by the grant which made by federal agencies to the individual. In hearings in the House of Representatives one member of the Veterans' Affairs Committee of that body made a remark that veterans' education benefits are not intended to subsidize Higher Education. Nevertheless, this has become the case. Since the institution of the G.I. Bill at the end of the Second World War, there has been a revolution in higher education with regard to access to it by the mass of the population. On the one hand, this has contributed to the above-mentioned expansion of the American economy through the availability of its benefits by large masses. On the other hand, this has contributed to a belief in the desirable universality of a college education. Perhaps, on this basis, college has been oversold. The old American dream that mere citizenship in this Republic would lead one to streets paved with gold, has over recent generations been replaced by the new dream that a college degree would lead one to streets paved with gold. Re- cent years have proved the fallacy of this belief. We have found that the possession of a degree does not guarantee success. We have found that, many people with such degrees are considered by the employment market to be "overqualified" individuals, thus leading such people to be a unique group within our underpriviledged, underemployed, popu- lation. College in fact, has been overdemocratized over the years, which has brought abuses in the educational process and a loss of edu- cational quality, especially where reputable academic practices have been employed. To the extent that many institutions have been rely- ing upon the G.I. Bill to establish programs of dubious academic quality, the fact that the proposed Chapter 32 requires the individual to make some sacrifice himself, leads one to think that this type of program would seriously limit the potential for the development or continuation of disreputable programs which have contributed to the reputation for abuse that Chapter 34 has acquired of late. Chapter 32, with all of its assets, does inevitably possess some limitations. I would agree with Senator Hartke that "the Veteran's Education and Employement Assistance Act of 1976 is neither a com- pletely finished product or all that I would like it to be." In its administration, as presently established, the individual de- siring to get the fullest use of it would have to begin participation from the beginning of his 36 month tour of active service. This would place great stress upon the military recruiters and the personnel in basic training installations in order to get the message across about it. These two sources of information for potential recruits or are far from the best transmitters of this type of information, however valuable it could be for the individual serviceman or women. My ex- perience with Project AHEAD has been that the recruiters consider such information to be extraneous to themselves and to their mission, so they tend not to stress it. In addition to the difficulties that could be encountered at the recruiting station, basic training is PAGENO="0464" 3084 not the best area for one to pick up information about a program which would concern hinself far into the future. The nature of basic training is such that one is extremely present-minded. Be- cause of such factors it night be desirable for there to be a pro- vision for retroactive enrollment by interested service personnel in the Chapter 32 program. Many people who night be informed about Chapter 32 at recruiting station or in basic training might not be interested in it at the time that they initially hear about it but would become strongly interested long afterwards. Provisions should be made that at any time during a person's enlistment, he or she could be able to make a retroactive paynent of the desired amount between $50 and $75 per month for each month that he or she has been in active service. The present G.I. Bill has been attacked from many sources as an encour- agement for people to leave the service at the end of their first en- listment. According to this claim, the Bill has only limited use as a recruiting device. Because the present G.I. Bill can be utilized by in- service personnel this argument is invalid. But the structure of the proposed Chapter 32 is such that it could only be utilized by post-service personnel and would thereby encounter with the objection made by opponents of existing G.I. Bill legislation. Therefore, provision should be made for in-service utilization of Chapter 32 by career military personnel. Another objection which I would have to the present state of Chapter 32 is the lack of specificity as to Department of Defense contributions to the monthly education allowance for the veteran. There should be a min- imum legal requirement for the Department of Defense input into the monthly benefit. D.O.D. funding of educational programs has been in pre- carious state in recent years. In order to match the level of projected Chapter 34 benefits the minimum Department of Defense contribution should be one-to-one. The Department of Defense could increase its contribution beyond the minimum for people which it desires to attract into certain branches or specialities and also to give it sufficient flexibility to attract people when recruiting would fall off and additional incentives are needed for recruiting. As the present Chapter 32 stands, there would be a liability for married enlisted personnel. The present legislation would call for the individual to sacrifice between $50 and $75 per month for a future benefit. Whereas this has its advantageous aspects as mentioned above, there is a definite liability for in-service married personnel. Even with the improved in- come level of military personnel and with their access to government hous- ing and to commissaryand exchange facilities, many of such married person- nel live extremely close to the poverty line and would be unable to make even a minimum contribution of $50 per month for their future education. There should be some provision for a lowering of this amount for married personnel. In addition to the liability placed upon married enlisted military personnel with regard to the contribution which they must make, there is, in the proposed legislation, no supplement for additional pay- ments to be made to veterans who are married. Under the present Chapter 34 additional payments are made to veterans who have dependents to sup- port. The change proposed between Chapter 32 as compared with Chapter 34 might perhaps be desirable from the vantage point of population con- trol advocates, as it would encourage postponing marriage until after graduation, but in practice it would discriminate against married vet- erans because of the extra strain incurred by them in going to school. PAGENO="0465" 3085 Such veterans generally go to school at night, they have greater over- all expenses than the single veteran, and the fact that they obtain education on a part-time basis would perhaps~bring them up to the pro- posed ten-year time limit without yet having obtained their final edu- cational goal. Administratively, the Veterans Administration would have to make changes in the process of application and certification in distinguishing between veterans covered by Chapter 34 and those covered by Chapter 32. Perhaps this could be accomplished by a simple modification of existing forms 1990 and 1999. On these forms it could be possible merely to indicate whether the veteran applying for benefits or being certified is covered by the one chapter or by the other. On the other hand, the Veterans Admin- istration could follow the existing practice of having different forms utitilized for different educational benefit Chapters. If it follows the latter precedent those individuals at institutions of higher learning who are concerned with the administration of V.A. benefits would find themselves saddled with new forms and new procedures to master. This being the case the federal program to study the potential elimination of excess government paper work would find itself defeated in this area. All in all, most institutions of high learning throughout the country would perhaps prefer a continuation of Chapter 34 benefits for all per- sonnel entering the military service as well as for those who possessed such benefits up until Nay 31, 1976. Nevertheless, in the words of the French political leader Jean Jaures, `politics is the art of the possible." This proposed legislation, for all of its minor faults, is within the realm of the possible. It follows the necessary tradition of constitu- tional republics of reaching a compromise between conflicting interests and principles. Because it would limit utilization of educational bene- fits to those veterans who have a serious interest in improving themselves, there would be less of an outflow of federal funds per veteran than under the existing 0.1. Bill structure. In the final result, I would prefer to see some kind of action instead of matters simply hanging in limbo as they have been for the better part of a year now. While we would still like to see those veterans whose benefits expired on May 31 have a shot at a con- tinuation of benefits until they complete their projected academic program, and would like to see the present structure continued, I recognize that matters cannot always approach the desired ideal. Therefore, the proposed Chapter 32 is one to which I can lend my strong support. Sincerely, Walter J(J'~anson Veterans-Counselor lona College New Rochelle, New York 10801 mg/th2 /01-4 78-226 0 - 77 - 30 (Pt.4) PAGENO="0466" 3086 SAN DIEGO COMMUNITY COLLEGE DISTRICT 3375 Camino del Rio South San Diego, California 92108 (714) 280-7610 OFFICE OF THE CHANCELLOR July 22, 1976 The Honorable Vance Hartke Senate of the United States Room 313 Old Senate Office Building Washington, D.C. 20510 Dear Senator Hartke: You have our support and appreciation for your extensive efforts to save the PREP Program, as outlined in your remarks to the Senate on July 2, 1976. The San Diego Community College District is wholly in accord with your concern that PREP be saved. The more than 11,000 service personnel who have participated in this program since its inception in February 1972 are dramatic evidence of PREP's salutary effectiveness. In an era of an all-voluntary military personnel, the importance of PREP is greatly increased. We stand ready, Senator Hartke, to assist in whatever way we can to strengthen your efforts to continue PREP. Our district is presently in the process of informing other members of your Committee of our unyielding belief that PREP adds a special dimension to the lives of our military personnel. Thank you again for your efforts. Sincerely, Garland P. Peed Chancellor GPP:lks cc: Guy McNichael Senate Veterans' Affairs Committee Room 414 Old Senate Office Building Washington, D.C. 20510 "THE COMMUNITY IS OUR CAMPUS" Adult and Continuing Education Centers * City College * Educational and Cultural Complex * Evenjng College * Mesa College * Miramar College PAGENO="0467" 3087 ~ A~IWT~E~T~ _ ANER1CAN VETERANS OF WORLD WAR tt-000EA-VIET NAN ___________ AMVETS National Headquarters CA VIE 1710 Rhode Island Avenue, NW., Washington, D.C. 20036 (202) 223-9550 ROBERT A SNIFFER National Service & Legi,latjy~ Director July 26 1976 ~, "~ The Honorable Vance Hartke \`~`t ~ 2~ `~76 :\ Chairman, Veterans' Affairs Committee ~ 313 Russell Senate Office Building 1 ~ Washington, D.C. 20510 5~~CT, Dear Mr. Chairman: In reference to Amendment No. 2005 (The Veterans Education and Employment Assistance Act of 1976), AMVETS has carefully studied the many facets of this proposed legislation. The following are our views in reference to Amendment No. 2005, S.969. TITLE I 1. AMVETS fully sipports the 8% increase in the subeistence allowance paid disabled veterans pursuing a course of vocational rehabilitation under Chapter 31 of Title 38, U.S. Code. We are In full concurrence with your view that this cost-of-living increase does not account fully for the changes in the Consumer Price Index since September, 1974. 2. We are in favor of eliminating the current termination date for use by seriously disabled veterans of Chapter 31 benefits when it is determined that such veterans are still in need of vocational rehabilitation. 3. The concept that permits Chapter 31 trainees to be trained in Federal *agency facilities on the same basis as trainees under the Rehabilitation Act of 1973 is in our estimation a substantive step to insure increased employment opportunities for Federal employment. We would further recommend that the experience gained by this training should hold considerable weight and be counted as qualified experience when that trainee applies for employment with the Federal Gvernment. TITLE II 1. AMVETS is in favor ofthe 8% increase in educational assistance allowance paid eligible veterans pursuing a program of education, including farm cooperative, elementary and secondary education and preparatory educational assistance under Chapter 34 of Title 38, U.S. Code. 2. AMVETS supports the 8% increase for individualized tutorial assistance. 3. AMVETS has no objection to extending the tutorial assistance program in certain cases to veterans enrolled in institutional or technical courses not PAGENO="0468" 3088 leading to a college degree. However, we believe it is imperative that the controls to prevent and reduce abuses in this specific area should be extremely stringent. 4. We are in concurrence in removing the current restriction to under- graduates use of the nine months of additional benefit entitlement granted in 1974 thereby allowing a maximum of forty-five months of eligibility for an approved program of education including graduate work. Our highly technical society has for a long time required advanced study/graduate work for many entry level positions. We are aware that the Senate Veterans' Affairs Committee has favored this particular issue. 5. It is our belief that an extension of the ten year delimiting period for use of Veterans Administration benefits for such periods of time that a veteran is prevented from completing his or her program of education because of physical or mental disability not as a result of the veteran's misconduct will clear up a longstanding injustice. 6. Allowing maximum entitlement for benefits under Chapter 34 for service of less than eighteen months if the veteran received a medical discharge because of a service-connected disability is an issue that merits the strong support of AMVETS. 7. The subject of terminating authority for new enrollments in flight training effective October 1, 1976 is an issue that will have to be referred to our National Convention to be held next month for their determination. We will report our position to you as soon as that determination is made. 8. In light of recent abuses of the Veterans Administration Education Assistance Program, it is the recommendation of AMVETS that the administrative provisions put forth by your Committee be strengthened so that there is a significant improvement in the amount of abuse. 9. In reference to the provision that extends to all programs of education, the requirement that no more than 85% of the students enrolled in certain approved courses be in receipt of Veterans Administration benefits or other Federal grants. Again, this is a subject that will have to be considered at our National Conven- tion, the termination of which will have to be reported back to your Committee some time in mid-August. It would be beneficial for us to have some clarification on this issue, such as (a) will there be flexibility enough in this provision to consider intercity schools who may have a higher than 85% ratio because of its geographic location and its low income constituency? (b) what is the per ratio? 10. We will also take up at our National Convention the provision to amend the veterans' student services program to permit completion of a work study agreement even if the veteran ceases to be a full-time student. TITLE III 1. Granting an 8% educational assistance allowance paid survivors of veterans who died of service-connected causes and dependents of seriously disabled veterans is consistent with the previous articles of this Act and therefore supported by our organization. 2. AMVETS has no opposition to extending maximum entitlement to benefits from 36 to 45 months for all persons training under Chapter 35. PAGENO="0469" 3089 3 3. The intent of the provision that liberalizing the period of eligibility for use by eligible children of educational assistance benefits under Chapter 35 is not quite clear. It is my understanding that this provision refers to Sec. 303, Section 1711 of Title 38, U.S. Code, Number 5.A, 5.B. If my assumption is correct, then AMVETS would support this provision. If my understanding is not correct, I would request clarification. 4. Consistent with the other Titles of this Amendment, we support strengthening of administrative procedures of this Title to prevent and reduce abuses. TITLE IV 1. The present position of AMVETS in reference to a peacetime 8.1. Bill was recently put forth before your Coniiiittee by our National Commander, Paul C. Welsh, on March 24, 1976 as part of AMVETS' 1976 Legislative Program. That position is: "AMVETS now agrees that the new all-volunteer Armed Forces presents compelling concepts that alter our feelings regarding G.I. training. We are in agreement that the 8.1. Bill was founded on the premise of providing readjustment assistance to partially make up for the time lost and the sacrifices put forth in the National interest of the country during wartime service. Today the Selective Service System has been dismantled and this Nation no longer has compulsory military service which was the basis for all three 8.1. Bills. This new volunteer structure regarding our Armed Forces places future responsibility for the educa- tion of the peacetime volunteer where it properly belongs--under the Department of Defense. This action would allow the cultural, social and economic investment impact of the 8.1. Bill to continue to contribute to the future of this Nation without taking its toll on other veterans' benefits." However, the concept of a new Post Viet Nam Era Veterans' Educational and Assistance Program in the form you have proposed is a subject I believe will re- quire careful study by AMVETS in National Convention to determine whether this alternative is viable enough so that our present position would be reversed. As Legislative Director for AMVETS and at first glance, Chapter 32 seems to be a new direction and thereby another alternative which will warrant a close study and discussion by the proper committee and delegates at our National Convention. As soon as our Convention is over, I will be most happy to report to you our position on this subject. TITLE V 1. We support the cost-of-living provision of this Title without qualification. 2. It is obvious that the Annual Veterans Administration Educational Loan Program available for eligible veterans, survivors and dependents has assisted many veterans. Increasing the amount of loan from $600 to $1,200 maximum annually is a good concept and, therefore, merits the strong support of our organization. 3. We are in concurrence with the intent of this provision to amend the Veterans Administration educational loan program to provide that interest charges on such loans shall be comparable to but shall not exceed those charged students under other Federally insured loan programs. The equalizing of interest charges under this provision is only just. PAGENO="0470" 3090 4 4. We support administrative provisions that will prevent or reduce abuses. 5. AMVETS has no objection to the provision that permits Veterans Admin- istration payments for intervals between school terms providing such periods do not exceed thirty days. 6. In reference to providing an 8% increase for administrative expenses incurred by state approving agencies in supervising approved educational institutions and further permitting in certain cases subcontracting by state agencies, we of AMVETS strongly support this provision. 7. We are in favor of increasing by $2 the reporting fee paid to institu- tions by each veteran or eligible person enrolled therein. 8. It is our position that the Educational Advisory Conmflttee to the Veterans Administration should be improved and strengthened. 9. Our organization supports the repeal of the current forty-eight month limitation for benefit and entitlement to any person eligible for training under more than one Veterans Administration education assistance program. TITLE VI 1. As part of AMVETS' 1976 Legislative Program, we have reconmiended to the Congress that the position of Director of the Veterans Employment Service be elevated to the position of Assistant Secretary of Labor for Veterans' Affairs. Therefore, this provision has the full and unqualified support of our organization. 2. AMVETS is convinced that this Conmiittee and the Congress must direct continuing attention and monitoring to the various programs which provide some small measure of preferential consideration to fully qualified veterans in ob- taining and retaining suitable employment in both public service and private industry. To this end, AMVETS would like to bring to the attention of this Connmittee our mandated position for an essential employment program. AMVETS urges and supports a vigorous program in Federal employment to insure that the benefits and preferences embodied in the Veterans' Preference Act of 1944, as amended, are strictly enforced both as to the letter of the law and to the in- tent of the law and are not permitted to become by lip service only platitudes reduced to paper. The Federal Government is the largest single employer in the United States. Yet we see the percentage of veterans hired by the Federal Government continuously decreasing. This decrease cannot be attributed to the advancing age of veterans and the withdrawal of veterans from the workforce. Rather, it is felt that the program of veteran preference in Federal employment is being given passive rather than active consideration resulting in part at least from the emphasis being placed on other programs which have currentpopu- larity, namely, those programs being sponsored and given prominence as the result of the publicity given to the Civil Rights Act and its subsequent amendments. Therefore, any action taken by your Committee to expand and strengthen the administrative controls to ensure that eligible veterans receive satisfactory employment assistance would be most welcome and strongly backed the the AMVETS organization. TITLE VII AMVETS is in agreement with both provisions of this Title. PAGENO="0471" 3091 The numerous provisions of this legislation compels AMVETS to be conscious of the funding factor involved in this legislation. Obviously under no circum- stances would AMVETS support the funding of the new concepts proposed by Chapter 32 out of Fiscal 1977 Veterans Administration budgeted allocations for on-going programs and would be contingent upon approval of the appropriate additional funds to the Veterans Administration to fulfill the intent of this legislation without affecting the present on-going programs. We will attempt to be timely with a report to your Committee on the pro- visions that we have not been able to take a position on. If there are any questions in reference to our written comments, please do not hesitate to con- tact me. It is our hope that our comments will be helpful in your Committee's deliberations on this Amendment. Very truly yours, National Service and Legislative Director RAS:dal PAGENO="0472" 3092 International Programs The Florida State University Office of the Director Tallahassee, Florida 32306 July'26, 1976 ~ The HonOrable Vance Hartke United States Senate Washington, DC 20510 My dear Senator Hartke: I have read your letter of July-14 and reviewed Amendment No. 2005 to the `Veterans Education and Employment Assistance Act - S.969." I wish to congratulate you and Senator Stafford for what I believe to be sound judgments for both the veteran and education. Your amendment suggests some long range advantages for improving the educational level of both the military and eventually the civilian labor market. I strongly recommend that PREP be continued under VA's jurisdiction. The overall education advantages derived from PREP go far beyond the military needs for upgrading enlisted personnel. With PREP under VA jurisdiction the temptation to mold its education direction to fit the military's specific needs of the time will be lessened if not removed. I am certain those of us from institutions of higher education involved with PREP and the many servicemen and women on active duty who hope to improve themselves will endorse your amendment. Sincere /clobert F. Coyne, Directo International Programs cc: The Honorable Lawton Chiles The Honorable Richard Stone Belgrade Florence London Panama Canal Zone PAGENO="0473" 3093 Cthe Jlmerican Legion Department of Minnesota STATE VETERANS SERVICE RUILDING - ST. PAUL, MINNESOTA 55155 - PHONE (612) 291-1600 July 27, 1976 The Honorable Vance Hartke - Senator-Indiana Chairman, Senate Veterans Affairs Consiiittee Washington, D. C. 20510 Dear Senator Hartke: This letter addresses itself to Amendment No. 2005, the "Veterans Education and Employment Assistance Act of 1976," which is a substitution to S 969. The Department of Minnesota American Legion strongly supports and urges that a Veterans Employment Service be created within the Department of Labor and that the Service be headed by an Assistant Secretary of Labor for Veterans Employment. Concern and assistance for veterans employment has steadily declined and we are convinced that the only solution to this problem will be the appointment of an Assistant Secretary of Labor. Unfortunately, we have found that the several layers of bureaucracy that exist within the Department of Labor have stifled the voice of the veteran and any position less than that of an Assistant Secretary of Labor is not acceptable to us. Thank you very much for your consideration and support for Amendment No. 2005. Thank you for your attention. yours, MOMSEN Department Adjutant FCM:jy cc: Austin E. Kerby, Director for Economics Members of Senate Veterans Affairs Cosnittee Myllo S. Kraja, Director, Legislative Commission Frank I. Hamilton, Chairman, National Legislative Commission PAGENO="0474" 3094 STATE OF SOUTH CAROLiNA DEPARTMENT OF EDUCATION COLUMBIA July 27, 1976 The Honorable Vance Hartke Chairman, Committee on Veterans Affairs United States Senate Washington, D. C. 20515 Dear Senator Hartke: On behalf of the National Association of State Approving Agencies, please accept my sincere thanks for affording our Association an opportunity to comment on amendment number 2005 to Senate Bill 969. The comments listed below, exclusive of comment on Section 1780(a), have not been mandated by our Association. A sampling was taken from our officers and these comments represent their thinking. Section 1674 This section states, "Progress will be considered unsatisfactory at any time the eligible veteran is not progressing at a rate that will permit such veteran to graduate within the approved length of the course based ott the training time as certified through the Veterans Administration unless the Administrator finds there are mitigating circumstances." Apparently, this is not consistent with the current law which allows a veteran or eligible person to receive full time educational benefits for pursuing twelve credit hours. It is quite possible that progress could be determined as unsatisfactory at the end of the third semester based on the following: 1. Normal number of credits to graduate from a four year institution - 130. 2. Twelve semester hours each semester times three equals thirty-six. 3. Remaining semester hours to complete in five semesters - ninety-four. 4. 18.4 semester hours per semester to graduate within the allocated time. 5. Many institutions will allow outstanding students who have grades of "B" or more to take more than sixteen semester hours per semester. 6. This would eliminate the veterans or eligible person in this case at the end of the third semester PAGENO="0475" 3095 Senator Vance Hartke Page 2 July 27, 1976 Section 1673 This states, "The Administrator shall not approve the enrollment of any eligibleveteran not already enrolled, in any course (other than one offered pursuant to subchapter V or subchapter VI of this Chapter or any farm coopera- tive course) for any period during which the Administrator finds that more than 85% of the students enrolled in the course are having all of their tuition, fees or other charges paid to or for them by the educational institution or by grants from any Federal agency." This possibly could preclude the enrollment of any veteran or eligible per- son in many of the state supported community college type schools and the majority of business schools and other vocational schools. In the community college schools (tax-supported) generally the tuition and other charges are relatively small. The majority of students are receiving some type of grant from a Federal agency which would in many cases cover these costs. Section 1780 Our Association concurs with Section (4) which states educational allowances will not be paid to any eligible person or veteran for a course for which the grade assigned is not used in computing the requirements for graduation, in- cluding a course from which a student withdraws, unless the Administrator finds there are mitigating circumstances. A resolution was adopted by our Association similar to this. I am reasonably assured that our Association would also concur that educational allowances should not be paid to any eligible veteran or person for auditing a course. Listed below are comments made by our President, Charles A. Shubat of Minnesota: "Verification of the 85-15 ratio in all courses will pose an extra burden which should be considered in contracting. Section 207. Twelve-credit enrollment minimum is inconsistent with comple- tion of a college course in four academic years. Institutions will probably object to a $2 increase in reporting fees since they have suggested that a $10 total fee would be required to keep up with paperwork. Title 38, Section 1674 and elsewhere in the law, uses the words "according to the regularly prescribed standards and practices of the educational institution." Whereas this may have been acceptable language in the past, State Approving Agenc!es regularly reject standard practices as unsatisfactory and replace such standards with VA requirements. Some effort should be made to strike the lan- guage in Title 38." PAGENO="0476" 3096 Senator Vance Hartke Page 3 July 27, 1976 Our Association, even though it is not germane to our responsibilities, concurs on the following: a. Increase by 8% the educational assistance allowance. Reason: Cost of Consumer Price Index. b. Allowing a maximum of 45 months. Reason: Equal provisions to all. c. Clarifying, codifying and strengthening certain administrative provisions of the VA educational assistance program to prevent or reduce abuses. Reason: Our AssociatiOn, on May 18, 1975, adopted a resolution stating that colleges and universities were not enforcing adequate controls of attendance and pro- gress of veterans and urged that steps be taken to prevent a continuation of this waste. Copies of this resolution were sent to the Chairman of the House and Senate Committees on Veternas' Affairs (copy of this resolution is attached as Exhibit "A"). Sincerely, `7 ~ rvin P. Busbee, Chief Supervisor State Approving Section NPBfdb Enclosure: As stated PAGENO="0477" 3097 - - Exhibit "A" EXTRACT REPORT OF THE NATIONAL ASSOCTATION OF STATE APPROVING AGENCIES MIDWINTER CONFERENCE BURLINGTON HOTEL, WASHINGTON, D.C. MARCH 16-19, 1975 - 5. The GENERAL Comrni ttee. One resolution was presented regarding attendance and progress at colleges and universities as follows: WHEREAS; Agencies recognized to accredit colleges and universities do not include attendance and progress as requirements bf accreditation, and, WHEREAS; Colleges and universities accredited by such agencies are not enforcing adequate controls of attendance and progress of the veterans who receive educational allowance while enrolled, and WHEREAS/ This lack of control permits excessive absence and repeat of courses and the veteran getting educational ajiowance which has led to large amounts of money paid which is unnecessary and legally questionable, * THEREFORE BE IT RESOLVED: The National Association of State Approving Agencies urges that steps be taken to prevent a continuation of this waste, FURTHER THAT: A copy of this resolution be transmitted to the Chairman of the Senate Committee on Veterans Affairs and the Chairman of the House Convnittee on Veterans Affairs. PAGENO="0478" 3098 * WASHINGTON OFFICE * 1608 K STREET. N.W. * WASHINGTON. D.C. :0006 * For God and Country July 28, 1976 Honorable Vance Hartke, Chairman Subcommittee Ofl Read) ustment, Education and Employment Senate Committee on Veterans Affairs 414 Russell Senate Office Building Washington, D.C. 20510 Dear Chairman Hartke: Enclosed are copies of The American Legion's statement on Amendment No. 2005, a substitute to S. 969 and cited as the "Veterans Education and Employment Assistance Act of 1976' We thank you for the opportunity to express our views on this important legislation. Your consideration of including the Legion's comments in the permanent hearing record in lieu of a personal appearance is very much appreciated. Sincerely, S. Myli~. Kraja, Dir~tor National Legislative Commission cc: Mr. Guy McMichael, Counsel Senate Committee on Veterans Affairs PAGENO="0479" 3099 STATEMENT OF E. H. GOLEMBIESKI, DIRECTOR NATIONAL VETERANS AFFAIRS A ND REHABILITATION COMMISSION THE AMERICAN LEGION TO THE COMMITTEE ON VETERANS AFFAIRS, UNITED STATES SENATE JULY 27, 1976 Mr. Chairman and Members of the Committee: We appreciate the invitation extended to The American Legion to submit written comments on Amendment No. 2005, a substitute to S. 969, and cited as the "Veterans Education and Employment Assistance Act of 1976. " Our comments in this statement are directed to Titles I through V and VII, of the substitute amendment. Comments on Title VI are on a separate statement by Austin E. Kerby, our Director for Economics. Title I of the amendment would - 1) Increase by 8 percent the subsistence allowance payable to veterans pursuing a program of vocational rehabilitation under 38 USC, Chapter 31. 2) Eliminate the termination date of June 30, 1975 in section 1503(c) of Chapter 31, so as to continue eligibility for vocational rehabili- tation of blind and other seriously service-disabled veterans when the seriousness of the disability indicates a need for further or additional training. 3) Permit those veterans eligible for vocational rehabilitation under Chapter 31 to be trained in Federal Agency facilities on the same basis as other trainees under the Rehabilitation Act of 1973, thus affording them an opportunity to enter Federal employment. PAGENO="0480" 3100 -2- We are in agreement with and support the purpose of this Title. Title II of the amendment proposes to - 1) Increase by 8 percent the educational assistance allowance paid eligible veterans in programs of education - including farm cooperative, elementary and secondary education, and preparatory educational assistance - under 38 USC, chapter 34. 2) Increase by 8 percent the tutorial assistance authorized eligible veterans under section 1692. 3) Amend section 1692 to extend the tutorial assistance provisions of section 1692 to eligible veterans enrolled in and pursuing an institutional or technical course not leading to a standard college degree, and who have not received a high school diploma or equivalency certificate. Such assistance would be limited to the academic .portions of such course. 4) Remove the current restrictions to undergraduate use in section 1661(a) of the additional nine months benefit entitlement, thus permitting the additional entitlement granted beyond 36 months to be used for graduate as well as undergraduate study. 5) Extend the 10-year delimiting date in section 1662 for use of educational assistance for periods of time that a veteran is prevented from completing his or her education or training objective because of a physical or mental disability, not the result of the veteran's misconduct. 6) Authorize maximum entitlement of 45 months of educational assistance under section 1661 for service of less than 18 months in the PAGENO="0481" 3101 -3- case of a veteran issued a medical discharge because of a service- connected disability. 7) Amend 38 USC, chapter 34 so as to terminate authority for new enrollments in flight training effective October 1, 1976. 8) Clarify and strengthen certain administrative provisions of the educational assistance program to prevent or reduce abuses. 9) Extend to all programs of education the requirement that no more than 85 percent of the students enrolled in certain approved courses be in receipt of VA educational or training benefits or other Federal grants. 10) Amend the veteran-student services provisions of section 1685(b) so as to permit completion of a work study agreement even if the veteran ceases to be a full-time student. Without reservation, we approve of and support all amendments proposed under Title II with the exception of 3 and 10. While we are not opposing extension of the tutorial assistance program to the non-degree vocational and technical courses, we want to express the belief that it would encourage enrollment of non-qualified students on the assumption that tutorial assistance will overcome any academic deficiency of the veteran. In enacting the elementary and secondary assistance provisions of section 1691, the Congress had in mind a program that would enable educationally disadvantaged veterans a 78-226 0 - 77 - 31 (Pt. 4) PAGENO="0482" 3102 -4- means of obtaining a secondary diploma or equivalent without loss of earned entitlement. We believe that educationally disadvantaged veterans should be encouraged to pursue this approach before enrolling in vocational and technical courses for which they are not qualified academically. Although we are not opposing the purpose of the 10th provision of this Title, we suggest reconsideration of the change to section 1685 (veteran-student services), so that the work study agreement could be completed, even if the veteran ceases to be a full-time student but not less than one-quarter time. Title III - amendments proposed under this Title would - 1) Increase by 8 percent the educational assistance allowance paid under 38 USC, Chapter 35 to surviving spouses and children of veterans who died of service-connected causes, or who, at time of death, the service-connected disability was rated total, and the spouse and children of veterans whose service-connected condition is rated totally disabling. 2) Extend maximum entitlement to the educational assistance allowance from 36 to 45 months for those eligible under 38 USC, Chapter 35. 3) Amend section 1712 to liberalize the period of eligibility for use by eligible children of educational assistance available under 38 USC, Chapter 35. PAGENO="0483" 3103 -5- 4) Clarify, codify and strengthen certain administrative provisions of the Chapter 35 educational assistance program to prevent or reduce abuses. Title IV - the proposed amendments would under this Title - 1) Set December 31, 1976 as the terminating date for establishing eligibility for veterans educational assistance under 38 USC, Chapter 34. 2) Establish for those men and women entering the Armed Forces on or after January 1, 1977; a new Chapter 32 educational program known as Post Vietnam Era Veterans Readjustment Assistance. 3) Provide that in the event universal military training is reimposed by law, that those entering military service after the effective date of such a change in the law shall be eligible for educational assistance under 38 USC, Chapter 34. As proposed in this Title, the new Chapter 32, the Post Vietnam Era Veterans Readjustment Assistance, has as one of its purposes - "To promote and assist the all volunteer military program of the United States by attracting qualified men and women to serve in the Armed Forces.' Without going into the intricate details of contributory and matching funds established for those eligible members who wish to participate, we wish to express our concern with the fact that the matching funds would be payable from VA appropriated funds and would be administered by that agency under the outlined provisions of 38 USC, Chapter 34. In its several PAGENO="0484" 3104 -6- statements to the House Committee on Veterans Affairs, and others, The American Legion expressed the views that educational assistance programs designed to stimulate enlistments in the Armed Forces should be adminis- tered by the Secretary of Defense, and funded from his appropriations. But since we support a strong national defense and a program of attracting qualified men and women into our Armed Forces, we voice no objection to the addition of the new Chapter 32 into the provisions of title 38, United States Code. Title V - amendments proposed under this Title of the measure would - 1) Increase by 8 percent the monthly training assistance allowance paid to eligible veterans or persons pursuing a full program of apprentice- ship or other on-job training, and provides similar increases for those pursuing a program of education by correspondence. 2) Increase from $600 to $1200 the maximum annual VA educational loan available to veterans, survivors and dependents under Subchapter III of Chapter 36 of title 38, United States Code. 3) Amend the VA educational loan program to provide that interest charges on such loans shall be comparable to but shall not exceed those charged students under other federally insured educational loan programs. 4) Clarify, codify and strengthen certain administrative provisions of the VA educational assistance program to prevent or reduce abuses. PAGENO="0485" 3105 -7- 5) Permit continued VA payments of educational assistance for intervals between school terms and to provide that when a veteran or eligible persons transfers from one institution to another, payments are permitted providing that in either event such periods or intervals do not exceed 30 days. 6) Increase by 8 percent the allowance paid for administrative expenses incurred by State approving agencies in supervising approved educational institutions, and further permits in certain cases, subcontracting by State agencies. 7) Increase by $2 the reporting fee paid to institutions by the Veterans Administration for each person or eligible person enrolled therein. 8) Strengthen and improve the Education Advisory Committee to the Veterans Administration. 9) Repeal the current 48-month limitation for benefit entitlement to any person eligible for educational assistance or training under 38 USC, Chapters 31, 34 and 35. We approve of and support the amendments proposed under Title V. Title VII - amendments under this Title would - 1) Provide, except as otherwise specified, that other provisions shall become effective October 1, 1976. 2) Clarify and strengthen those provisions that relate to assignment of VA benefits. PAGENO="0486" 3106 -8- 3) Accomplish a variety of technical amendments. We are in complete support of the provisions proposed under this Title. In closing, Mr. Chairman, we appreciate your inviting the comments of The American Legion. We hope that our reservations or concerns with certain provisions of S. 969, as amended, do not serve to delay consideration by your Committee, and report to the United States Senate for considerationS PAGENO="0487" 3107 Directorate DODDSEUR PREP Administration P20 New York 09164 4 August 1976 Honorable Vance Hartke Chairman, Committee on Veterans Affairs United States Senate Washington, D.C. 20510 Dear Senator Hartke: As a native-born Hoosier I have noted both your proposal of a new bill for non-high school graduates on active duty in the Armed Forces and your invi- tation to submit written comments on the proposed amendment. As a teacher for DODDSEUR PREP, now involved in the administrative section of that program, I am particularly pleased to hear that consideration is being given to continuing the, program under VA. I `d like to present you with some views of the DODDSEUR PREP program that perhaps would not otherwise be brought to your attention. The results of our program here in Europe have been most satisfying. Commanders have been very enthusiastic and many have put PREP at the top of their educa- tional priorities for their men. Major General John K. Stoner, Jr., spoke of PREP as "a viable part of the Army's expression of concern for its per- sonnel and their well being. Brigadier General George B. Price views PREP as preparing our soldiers to be trained, to learn, to deal, to cope, to survive . . . fulfilling a real need in our society and establishment." One of the strongest statements in support of PREP came from General W.H. Vinson while he was commander of SETAF. He praised PREP as "the most posi- tive and beneficial program for the men that exists under my command." It was his contention that if top officials `could see for themselves the merits of our program . . . measures would be taken to extend the program indefinitely." The service personnel who have attended PREP are enthusiastic in their support for the continuance of the program. There are many instances of servicemen extending or reenlisting for the opportunity of continuing their education in the PREP program. They are aware that their chances for promotion in the military are better and that their abilities in basic skills are greatly improved as a result of PREP instruction. PAGENO="0488" 3108 Senator Vance Hartke 4 August 1976 Efforts of our staff to provide a PREP program of excellence are proof of our own enthusiasm for the program. DODDSEUR PREP, as the largest institution offering PREP in Europe, is fully accredited, holding charter membership in North Central Association's organization of Sepa- rately Administered Adult High Schools. The late Dr. John Stanavage, Executive Secretary of NCA at the time of our accreditation, challenged DODDSEUR PREP's curriculum leaders to work with teachers in identifying the competencies that constitute the sustaining courses of the program and to develop competency-based tests to measure the students' acqui- sition of those competencies. During the past two years intensive work has been done to meet that challenge. Instructional aids and assessment devices that are highly relevant to our program have been produced. Dr. James Popham, a UCLA professor who is a leading authority in the field of competency-based education, is assisting DODDSEUR PREP personnel in the development of an educational system that is truly competency-based. I believe that it would be a tremendous loss to our service personnel if a quality program such as this, fulfilling the basic educational needs of the military community, should be discontinued. I've taken the liberty of enclosing some information on the DODDSEUR PREP program for your perusal. Sincerely, Elizabeth Keppner PAGENO="0489" 3109 BACKGROUND Provision for USDESIA PREP came in March 1970 when Congress enacted amend- ments to the Cl Bill in Public Law 91-219. The law provided for Veterans Administration (VA) payments to military personnel enrolled for instruction in approved schools, primarily to earn a high school diploma and to prepare for further educational and training opportunities. In the past, remedial and high school instruction for the military in Europe had been funded and administered by education agencies of the mil- itary branches. In September 1970, USDESEA received notification to imple- ment PREP at military installations in accordance with VA funding procedures and in conformance with the Policies and Standards for Separately Admin istered Adult High Schools of the North Central Association of Colleges and Schools (NCA). In spring 1971, USDESEA PREP launched pilot programs in Karlsruhe and Kaiser~lautern, Germany. Today, USDESEA PREP operates on 123 Navy bases, Air Force bases, and Army posts in Germany, Italy, England, Belgium, Morocco, and Sicily. PREP centers may be one-room schools or contain as many as 250 students, com- parable to a small high schopl. PREP courses are also offered on board Navy ships. Even though USDESEA PREP tuition charge has not changed from the original $143.50, and though USDESEA PREP's charge is lower than that of any other institution offering PREP, it is interesting to note that we have spent $300,000 in the past four years renovating GED centers. In addition to that, PREP returns all excess funds to the Department of Treasury yearly. Since the inception of the program, funds in excess of $1 million have been returned. Since about 90 percent of the students are located in Germany, USDESEA PREP's four geographic areas of responsibility align roughly with major Army commands in Germany; responsibility for USDESEA PREP in other European countries is assigned to the four USDESEA PREP Adult High School district offices located in Frankfurt, Nuernberg, Stuttgart, and Kaiserslautern, Germany. USDESEA dependent high schools located in the four cities issue the adult high school diplomas for the districts. STAFF DEVELOPMENT In accordance with NCA and Civil Service standards, USDESEA PREP teachers must possess a Bachelor's degree to include 18 hours in education and 24 semester hours in the area to be taught. They are hired locally through CPO offices on an intermittent basis, working a 20- to 39-hour week depending on the workload. 90% of the teachers are dependents. All school administrators and supervisory staff members possess Master's degrees in education and at least three years related experience. Continuing staff development is of prime concern to USDESEA PREP as evidenced b~ the many conferences and workshops conducted over the past four years. Attached is a review of all such workshops conducted by American educational institutions. PAGENO="0490" 3110 CURRENT STATUS FACT SHEET First 9 Months Projected for Previous Total FY 76 Full FY 76 4 Years New Students 17,000 24,000 62,705 Monthly Enrollment Average Daily Attendance 4,692 4,500 Diplomas 5,063 6,700 14,533 Course Completions 40,890 53,000 112,461 Total number of students for FY 76 30,000 Teachers (Varies with monthly enrollment.) 570 Teachers-in-Charge 110 Above-Teaching Level Personnel 44 (21 - women) Approximately 25% of PREP students enrolled in the high school completion program receive NCA accredited USDESEA high school diplomas each year. 89% of PREP students are in the high school completion program. The remainder are remedial/refresher. CRITERION-REFERENCED EQUIVALENCY TESTING (CR8'!') Since 1971, USDESEA PREP students have been granted high school credit on the basis of scores attained on the General Educational Development (GED) equivalency tests. However, in 1974 when the IJSDESEA PREP schools were evaluated for accreditation, the North Central Association (NCA) strongly recommended that the GED tests be replaced by more suitable criterion-refer- enced measures. In 1975 USDESEA PREP committed itself to the development of such tests for the sustaining courses of its curriculum program. And it contracted with a stateside testing firm, under the direction of Dr. W. James ~opham, to develop both test item pools and specification documents to which these items would be referenced. At the present time USDESEA PREP is developing curriculum resource materials such as Student and Teacher Guides from the skill specification documents produced for courses in General Math I and U.S. History. At the culmination of the CRET project such materials will be available in the language arts area, and for a course in U.S. Government. And in addition to the desired equivalency examinations, criterion-referenced test items will be available. for diagnostic and progress monitoring usages. PAGENO="0491" USDESEA PREP WORKSHOPS CONDUCTED BY AMERICAN ORGANIZATIONS North Central Association Evaluation Workshop Dr. John Stanavage Executive Secretary, NCA 7 - 14 February 1973 Reading Workshop Pr. Evelyn Searles University of Miami 4 - 6 April 1973 Counseling Workshop Dr. Howard H. Splete Department Chairman, Guidance ~ Counseling Wayne State University 26 - 30 April 1973 Counseling Workshop Dr. Doug Arbuckle Chairman, Guidance Department Boston University Spring 1973 Kollnau Workshop Dr. Herman Warsch Director, Educational Projects C. S. Mott Foundation, Flint, Michigan and Dr. Howard H. Splete Department Chairman, Guidance ~ Counseling Wayne State University August 1973 North Central Association Evaluation Workshop Dr. John Stanavage Executive Secretary, NCA 12 - 20 Octbber 1973 Individualized Instruction Workshop Dr. Mike Debloois Professor, Utah State University December 1973 Criterion Referenced Equivalency Test irv', Workshop Dr. N. James Popham Professor, UCLA September 1974 Reading Workshop Dr. Lois Bader Associate Professor, Michigan State University Spring 1975 Teacher-in--Charge Workshop Dr. Howard H. Splete Department Chairman, Guidance ~ Counseling Wayne State University Spring 1975 Instructional Materials Workshop Dr. W. James Popham Professor, UCLA February 1976 Projected Teacher Supervisor Workshop Dr. W. James Popham Professor, UCLA May 1976 PAGENO="0492" TABLE OF ORGANIZATION r~Tj PAGENO="0493" 3113 BARSTOW COMMIJNIry COLLEGE DISTRICT 2700 BARSTOW ROAD BARSTOW, CALIFORNIA 92311 August 5, 1976 ~76 The Honorable Vance Hartke Chairman 3 Veterans' Affairs United States Senate Washington, D. C. 20510 Dear Senator Hartke: Barst~ow College is currently offering PREP courses, shipboard, to Navy personnel deployed around the world. On behalf of the many men who will profit from this instruction, I wish to thank you for your proposal to continue the program (Amendment No. 2005, Senate Bill 969). However, the proposal to limit or structure composi- tion of classes by an 85/15 ratio completely ruins any chance of offering PREP classes on ships. In addition, may I point out the inequity created by the "matching funds proposal." In the majority of cases a veteran is involved in educational endeavors in order to obtain employment or to up- grade skills obtained in the military. This type of "dangled carrot" may be good PR for currently employed constituents, but it will prove a fatal stumbling block for needy veterans. I agree wholeheartedly with your objective (eliminating possible abuses), but question the practicality of the requirement. Finally, I respectfully request your reconsideration of your posi- tion on assigntnent, by the veteran, of V.A. benefits. Many of our PREP students are subject to change in assignment on short notice based on national defense requirements. The serviceman's assignment of V.A. monies, by Power of Attorney, insures reimbursement to our institution for educational services. Very truly your R. Will m a am President/Superintendent Bars/ow College mb PAGENO="0494" 3114 NORTHWESTERN STATE UNIVERSITY OF LOUISIANA .1 August 5 1976 \U) ~ ~ o ~c~c Senator' Vance Hartke, Chairman ~`i'\ Veterans Affairs Committee 1 United States Senate ~~i0H, ~ Washington, D. C. 20510 Dear Senator Hartke: May I take this opportunity to thank you for giving me an op- portunity to react to the proposed legislation sponsored by you and Senator Stafford. My first response would be that I would like to see the G.I. Bill continued as it has been previously. However, I realize this may be an impossibility and certainly feel that the compromise which you and Senator Stafford have proposed is much better than losing the entire program. I feel very strongly about the G .1. Bill since I have been a recipient of It myself. I may be misinformed, but I believe the benefita~ received through the G .1. Bill have been more than justified due to the Increased income of those receiving them, and then paying a greater share of the income tax burden. We at Northwestern State University have had some real fine experience with the PREP program through our association with Fort Polk here in Louisiana. I certainly would not like to see it abandoned, and I am pleased to see that your amendment would keep the PREP program intact. Senator, if we are to continue to be free and independent, for the sake of our military preparedness, we must have a well-educated military. This is one possibility for persons in the military to receive at least a minimal education. Our experience with PREP leads me to urge you to continue your efforts to keep the PREP program intact, and if possible the other provisions of the G.I. Bill. Otherwise, I will support your compromise wholeheartedly. Again, let me thank you for giving me an opportunity to react to your proposed amendment. Sincerely, ~ President ARK/sw PAGENO="0495" 3115 DIRECTORATE DEPARTMENT OF DEFENSE DEPENDENTS SCHOOLS EUROPEAN REGION 1~7~ AEUED-PA Honorable Vance Hartke Chairman, Committee on Veterans Affairs United States Senate Washington, D.C. 20510 Dear Mr. Chairman: Thank you for your recent correspondence requesting our views concerning the committee's alternative to the termination of the GI Bill and con- tinuation of VA funding of the Predischarge Education Program. As Director of one of the largest PREP programs either jn the United States or abroad serving 125 military installations with an average monthly enrollment of 5,000 students, I am forwarding the following comments based on our five years' experience with the program. The purposes of your Amendment No. 2005 as outlined in Paragraph 1601 are commendable. We know from experience that educational benefits are of prime importance to service personnel, both in terms of recruitment and reenlistment incentives. To lose these benefits would be detrimental to our Armed Forces and our country. There are three sections of the amendment which we feel may be in opposition to your purposes and to the implementation of this amendment in the field: (1) The operation of PREP would be drastically impeded if the power of attorney is cancelled as suggested in Title VII. Without the power of attorney, we would have tremendous difficulty collecting from students on our installations located in five European countries. It should be noted that most of our tuition is collected after the student has left the program. This is due partly to the fact that many students do not enroll until the last six months of their military careers, and partly to the normal admin- istrative processing time. Should the power of attorney be eliminated, 4o~UhlOk~ (0) PAGENO="0496" 3116 AEUED-PA Honorable Vance Hartke the increased time and effort involved in collecting from 30,000 students per year would obviously create an increased manpower cost and a resultant higher tuition rate. Therefore, we strongly urge that funding continue under VA's jurisdiction for the following reasons: The VA has allowed the use of the power of attorney in the past. The VA has historically been involved with education programs for the military and has the necessary expertise and controls needed to implement such a program. (2) We noted on page four, Paragraph 1622, your proposal on "matching funds from the VA at the rate of $2 for each $1 contributed by the partici- pant". As the average base pay of the student enrolled in PREP is $350 per month, and the average education level of entering PREP students is 10th Grade, we gould be asking the average student to contribute $400 for the eight credits needed to complete his high school education. Adult high schools traditionally do not charge for course work, or if a charge is made, it is minimal. Therefore, we feel that a charge for high school is not only opposed to the general purposes of your bill, but also to the spirit of free public education in America. (3) We have noted that Title II indicates an increase in the education rate. We have operated our program with a tuition rate lower than the monthly entitlement rate for the past five. years. Even with a minimal tuition increase anticipated within the next year, our new rate would still be less than the existing monthly entitlement. Other than these three concerns, we are extremely pleased with the prospects of your compromise amendment passing. We thank you and the members of the committee for displaying continued interest in the welfare of our service personnel. Sincerely yours, (JOSEPH A. MASON Director PAGENO="0497" 3117 WA~IS. MAGM$WI.WA*II. MA.TON S. YSSIS. N.DAK. JoIISc.smN5N, MISS. SOMAlI L H!WSKA ~ JOT*IO.PAArOsS SJ. OUPPOSO P.CAOS. NJ. ~ ~ 0*0,51.0. ISOUTE, HAISAII SIQAISON, S ws~ois~ p~ COMMITTEE ON APPROPRIATIONS ~lOLU,IG5.$.C, IOS*YE.1.MO51.05IJ.. WASHINGTON. D.C. 20510 J. BSt*OM-rJOIIIINroN, IA. WAI.TSO 5. INJNOIASTOII, KY. August 6, 1976 Honorable Vance Hartke Chairman Senate Committee on Veterans Affairs ~4l4 Russell Senate Office Bldg. Washington,/D. C. 20510 Dear Mr. As a cosponsor of 5. 969, I have found your substitute amendment, the proposed Veterans Education and Employment Assistance Act of 1976 to be an interesting approach to a very difficult problem. The Committee on Veterans Affairs certainly faces a major challenge in its efforts to provide an adequate program of educational benefits in light of competing demands and the limitations of the First Concurrent Budget Resolution. I have recently received a rather detailed commentary on the provisions of the Veterans Education and Employment Act from the Chancellor of the University of Maryland. Since I noticed in your statement at the time this amendment was introduced that it is not a finished product, I am enclosing a copy of these comments for your review. I would appreciate your giving careful consideration to the concerns that have been expressed by the University of Maryland, and I hope that we can keep in touch on this impor- tant issue. With best wishes. rj ~7~'\ S inc erely, Charles McC. Mathias, Jr. United States Senator CM:wbdw Enc lo sure 73-226 0 - 77 - 32 (Pt.4) PAGENO="0498" 3118 ~ NWERSITY OF MARYLAND July 22, 1976 The Honorable Charles McC. Mathias, Jr. United States Senate Washington, D.C. 20510 My dear Senator Mathias: In this letter I would like to express some concerns we have relative to S.969-Veterans Education and Employment Assistance. As I am sure you are aware, the University of Maryland and our University College has served. hundreds of thousands of military personnel while they were in the military and many after they left the service. 5. 969 has some interesting and attractive features and the principal one relates to the individual's investment in his/her educational future and the government matching the service personnel's contribution on a 2 to 1 basis. We are painfully aware that the Administration is dedicated to the phase-out of the VA educational benefits and the proposed Chapter 32 may be better than no program. ~However, there are a number of serious pitfalls related to S.969, and we would like to identify several of these with you. 1. The combined contributions under the proposed legislation will fall far short of the benefits which the present Chapter 34 provides. Indeed, a maxinium escrow reserve of $8,100 will not purchase a great deal of education today and costs related to higher education continue to rise. Additionally, the following concerns should be cited. a. There are no financial provisions to distinguish between veterans with dependents and without dependents. b. There are no provisions for cost of living increases or adjustments. c. The $50 to $75 individual monthly contribution provides a narrow band. Many enlisted personnel at the lower ranks will find a $50 deduction a severe hardship. Others at upper grades may wish to and be able to invest a greater amount toward their education, but the limits are narrow and appear arbitrary. 2. Under this plan the individual can achieve his/her maximum educational "bank" in three years. The discerning individual will serve a three or four TIte ilVot~1dwide Adult Gonz~inuing Educar~ion G~ampzzs PAGENO="0499" 3119 The Honorable Charles McC. Mathias, Jr. July 22, 1976 Page 2 year stint and not re-enlist. The services will experience a decline of re-enlistments and efficiency, increased recruitment and training costs will rise markedly. 3. Educational benefits are available only after the individual leaves the service. Consequently, service personnel who participate in this program will have their In-service education opportunities adversely affected. He/she who will invest $50 to $75 per month under proposed Chapter 32 will not be able to pay the individual's 25% share of tuition and book costs under the tuition assistance program. Thus, the proposed Chapter 32 will limit the individual's growth through education while in service and will deprive the services of personnel enrichment and growth. 4. The complexities of this program, the provisions for hardship with- drawal, the uncertainties of young men and women who may consider entering military service will affect recruitment and participation. Recruiting officers and later educational advisors wiU.probably experience serious difficulties in dttempting to communicate the benefits available under Chapter 32. In order to raise the educational level of its personnel, it would make sense to have the services encourage individuals to parti- cipate under the tuition assistance program rather than contributing to their future education as outlined under Chapter 32. The original GI Bill provided World War II veterans with broad educational financial support. Tuition, books, laboratory fees and some laboratory equip- ment were covered by the legislation. Additionally, the individual received a subsistence allowance with recognition for the married veteran and also for other dependents. Gradually, through the years, the benefits eroded despite the fact that the nation's investment in the education of Its former service personnel resulted in returns several fold. Senator Stafford recognized this in his testimony (Congçessional Record, July 2, 1976, Pages 5-11695-6) and I quote, "...I question the wisdom of termination of all opportunities for advanced education after service in light of the contribution former GI Bill programs have made to our country and its veterans." We recognize that abuses have occurred under the present and previous legis- lation. But are these not matters that can be corrected through amendments and closer supervision? Chapter 32 may represent a partial loaf and be better than no loaf. But is not our nation short-sighted and penny wise if its priorities fail to recognize the windfall that accrued to it through previous legislation that provided veterans with educational opportunities? PAGENO="0500" 3120 The Honorable Charles McC. Mathias, Jr. July 22, 1976 Page 3 We urge you to give this legislation your serious attention. With best personal regards, Sincerely, Stanley J. Drazek Chancellor SJD:iw P.S. I, myself, have been the beneficiary of the opportunities provided in the GI Bill for World War II veterans. This legislation enabled me to complete my masters and doctorate degrees. PAGENO="0501" 3121 METROPOLITAN STATE COLLEGE 250 WEST FOURTEENTH AVENUE DENVER, COLORADO 80204 OFFICE OF THE PRESIDENT August 9, 1976 Mr. Vance Hartke 447 Federal Building Indianapolis, Indiana 46204 Dear Mr. Hartke: Yours and Senator Stafford's Amendment No. 2005, to S.969, "Veterans- Education and Employment Assistance Act of 1976," is a welcome step forward for veterans in this time of seeming abuse and constraints. We at Metropolitan State College, where approximately one-third of the student population are veterans, appreciate the efforts of you and your committee in attempting to provide the nation's veterans and in-service personnel with meaninful educational assistance. I applaud and support your efforts toward extending the PREP Program. Metropolitan State College has assisted over 200 in-service personnel at Lowry Air Force Base and Fitzsimmons Army Hospital since 1973. This program has made it possible for in-service personnel to avail themselves of educational programs which would not otherwise have been available to them. Through PREP, many in-service personnel have been able to enter institutions of higher learning and to further take advantage of educational benefits as veterans. Thank you for this opportunity to comment on this proposed legislation. Please accept my appreciation for the work you and your committee are doing on behalf of our veterans. Very truly yours, James D. Palmer PHONE: AREA CODE 303/292-5190 PAGENO="0502" 3122 S THE AMERICAN LEGION DEPARTMENT of WASHINGTON (206) 623-7680 DEPARTMEST HEADQUARTERS August 11, 1976 The Honorable Vance Hartke - Chairman, Senate Veterans Affairs Conusi~tet~:~) Senate Office Building Washington, D.C. 20510 - Dear Senator: American Legionnaires of the State of Washington strongly support Amendment #2005 to Senate Bill 969 and especially Sections 601 and 602 having to do with the creation within the Department of Labor of a separate agency to be known as the Veterans' Employment Service headed by an Assistant Secretary of Labor for Veterans' Employment, and Section 602 of Title VI of the Amendment, and Section 606. We would appreciate your doing everything possible as the chairman of the Senate Veterans Affairs Committee to insure passage of this Amendment. Sincerely yours, ~ Department Adjutant WED: jm PAGENO="0503" 3123 DEPARTMENT of ARIZONA 723 West Polk Street Phoenix, Arizona 85007 Telephone 2586845 ,, - - AMERICAN S LEGION * Over Fifty Years for God end Count,',' lUG ii.. ic~7~ August lie 1976 Senator Vance Hartke U.S. Senate Washington, D.C. 20510 Dear Senator Hartke: I am writing to you to urge your support for the "Veterans Employment Assistance Provision" proposed in Amendment No. 2005 to the Veterans Educa- tion and Employment Assistance Act of 1976. I have had the opportunity to work within the framework of the "Cranston Amendment" as a member of the Advisory Board of the Vietnam era veterans at Glendale Cononunity College. In that capacity I have become painfully aware of the difficulty of younger veterans in breaking into the job market. It seems to me that the creation of a Veterans Employment Services as a separate agency with the Assistant Secretary of Labor can do much to build the stature of that agency to a point where it may adequately impact on the employment services offices in our many States. As National Executive Committeeman Elect of the American Legion, I have had the opportunity to visit our Department of Labor Veterans Employment Office in Arizona and found that only one of our State Regional Offices in the Department of Economic Security has maintained parity in their record of placing job-seeking veterans. That was in the Yuma office. All others are considerably lower in their record of veterans placement in relationship to the non-veteran job seeker. If indeed the Senate wishes to carry out the mandate to assist the employ- ment of veterans, then the establishment of an Assistant Secretary can do much to solve the current situation wherein many subordinate government workers pay little or no attention to pursuing job priorities for the veterans. Your favorable consideration will be deeply appreciated. Sincerely yours, ~ald~Murphy~~/ National Executive ~ononitteeman Elect 7650 N. 43rd Avenue Glendale, AZ 85301 PAGENO="0504" 3124 511 STCD COLLCG JoHilsorl CITY,TrirICSSC 37601 August 11, 1975 Hon. Vance Hartke - United States Senate Room 313, Russell Building Washington, D. C. 20510 i I. ~ 23!O Dear Senator Hartke: As an active and concerned member of the educational community of upper East Tennessee and Southwestern Virginia, Steed College applauds any legislative efforts to promote quality postsecondary education. However, there are certain provisions of the proposed Veterans Education and Employment Assistance Act of 1976, commonly referred to as the "Hartke Amendment", which we feel would be detrimental to the process of higher education and particularly unfair and in- equitable to lower and middle income students, both veteran and non-veteran. The logic behind Sections 207 and 307 of the proposed amendment would seem to be an unwarranted intrusion of the federal government into higher education. These sections would appear to dictate to a collegiate institution the rate of progress which their veteran students must maintain in order to satisfy the federal government. We feel that this is a determination which must be made by each individual institution on the basis of its courses, their difficulty, and their student body. Furthermore, it is unclear how an increase in this minimum number of hours per quarter would enable the Veterans Administration to prevent or reduce abuses under the G. I. Bill program. On the contrary, it would appear to do little more than to discourage individual veterans from utilizing their earned educational benefits or, if they choose to use them, place them in an educational strait jacket which would hamper their potential for eventual su~cess. The extension and alteration of the so-called 85-15 ratio contained in Section 206 of the subject amendment would appear to hamper significantly the educational opportunities of millions of students without significantly reducing the potential for abuse of veterans educational assistance. The rapidly Increasing cost of higher education has made it practically impossible for any but the most affluent to finance a college level education without assistance from one or more of the federal educational assistance programs. It would appear that the implementation of the proposed legislation would accomplish little but to require many fine educational institutions to refuse admission to deserving students simply because they were not sufficiently affluent to finance their education without the assistance of federal programs and their chosen college was not populated by 15% af fluent students. Such restrictions go directly against the grain of American education in its attempts to provide quality educational opportunities to all PAGENO="0505" 3125 Senator Hartke -2- August 11, 1976 students, whether they be rich or poor and whether they seek this education in the public or the private sector. Such legislation would create the potential for a situation whereby the economic elite would be the only individuals able to make an effective choice as to their educational pursuits. I am certain that you and other members of the committee would not wish to promote such exclusivity in education. Furthermore, it is unclear just how a student population divided in the prescribed manner would prevent or reduce abuses currently found in programs of federal veterans educational assistance or in any other educational assistance programs for that matter. Therefore, we strongly encourage you and the United States Senate not to enact this amendment. An additional restriction contained in Section 509 of the proposed amendment would also serve to limit the choices available to America's students. One of the most significant developments in American education over the past twenty years has been the willingness of the collegiate institutions of this country to break down the restrictive wails of their campuses and to take their programs to the students who need and desire them. This philosophy has resulted in the saving of millions of dollars by allowing students to pursue a wide choice of collegiate objectives while remaining in residence in their own homes or local communities. If this movement of collegiate program to the student is restricted in any way, and particularly as stringently as it would be with the enactment of Section 509 of your proposed amendment, it would again significantly reduce the educational opportunities of America's veteran students and in doing so would mean that only the economically affluent would be free to have a wide selection of educational options. The options of those veteran students then would be restricted to the colleges and universities that by pure coincidence of birth and residence are close to their homes. Again we strongly suggest that America's progress has been based upon avoiding educating only our wealthy and providing broadest possible range of educational opportunities to our college students. We applaud strongly the basic motivation of your committee to reduce and prevent abuses of all federal educational assistance programs, particularly those pertain- ing to the veteran student. However, we suggest that the legal mechanics for the prevention of these abuses does already exist and requires only additional enforcement efforts, not additional legislation. Encouragement of the Veterans Administration to diligently pursue those students who would abuse their opportunity has resulted in the uncovering of many of these abuses during 1976. These, we are certain, are being pursued diligently, utilizing presently existing laws. The abuses of these programs, both institutionally and individually, cannot be prevented by further legislation, but certainly can be reduced by diligence and detection and pervasive prosecution. of all guilty parties. Thank you for your considerations of our feelings in this matter. If we as an institution can be of assistance in any way, please contact us. Sin es E. Rupe irector of External Affairs PAGENO="0506" 3126 ~ALIFQRNIA STATE VNIVE~SITY. SAç~AM ENTO 6000 J STREET SACRAMENTO CALIFORNIA 95819 )\ ~ C~7O August 13,1976 Mr. Vance Hartke, Chair (IN) 313 Russell Senate Office Building Washington, D.C. 20510 Dear Mr. Hartke: On July 19, the American Legion presented its support of Amendment No. 2005 to S969 to the Senate Conmittee on Veterans Affairs. As I understand it, Amendment No. 2005 provides an alternative to the Veterans Employment Assistance Provisions in Title VI of S969. At the Veterans Service Center at CSU-SacramentO, we have spent hours of time and energy trying to provide an effective employment service delivery system for our veteran clIents. The job has not been easy, nor has it been rewarding. Why? The reasons are exactly the sane as those given by the American Legion on July 19. Department of Labor administrators in Sacramento tell us, "We know problems exist, and we're trying to get to the heart of them." CETA administrators tell us, "Oh, we're serving (Vietnam era) veterans, and we're monitoring our subgrantees to ensure they're complying with DOL guidelines." State Employment Development Department (EDD) people tell us, "We're trying like hell to get employers to honor the spirit of our 48-hour (veterans preference) provisions, but it's awfully tough to monitor." Veterans Employment Representatives (VEFI5) at local EDO facilities even visited us and said, "What are you doing sending vets to us for CETA jobs? We have nothing for them." Why has our job been tough? Because DOL does not enforce Title 38 regulations; CETA Prime Sponsors are not monitored well, and often do not comply with their own "manpower plans," all of which are approved by DOL and cost the nation bundles; EDO is often helpless in trying to ensure the usefulness of "48-hour veterans preference" provisions; and VERs don't seem to be effective in serving as an advocate of the Vietnam era veteran. To improve employment service to veterans, it is necessary to either strengthen existing laws or enforce them with much more diligence and vigor. The creation of a separate DOL agency such as the Veterans Employ- ment Service proposed in Section 601 of Title VI headed by an Assistant THE CALIFORNIA STATE UNIVERSITY AND COLLEGES PAGENO="0507" 3127 Mr. Vance Hartke 2 August 13, 1976 Secretary of Labor for Veterans Employment might be a useful approach to monitor and enforce existing laws. However, such an agency cannot simply be created, then staffed and headed by another faceless, unresponsive bureaucrat. It must be designed and developed with care, foresight, and with an eye toward solving the real problems of veterans employment. It must be staffed with people who really care--preferrably Vietnam era veterans with prior experience in veterans employment service, who readily recognize the hardships today's economy places on the effectiveness of employment programs. Although Vietnam era veterans may have philosophical ideals not necessarily in consort with those of traditional veterans groups like the American Legion, it seems that their statement on July 19 should be welcomed whole- heartedly by Vietnam era veterans throughout the nation. Personally, I support the creation of a mechanism to improve employment service to veterans, and I endorse the American Legion's views on Amendment 2005. We at the Veterans Service Center shall remain at your disposal for assistance, if you should require it, in designing and implementing a more effective and efficient program to serve the employment needs of veterans. In addition, we wish to thank you and the committee for your continued efforts over the years to serve the millions of Americans whose personal devotion and sacrifice have helped preserve the ideals of our national heritage. Sinc,~~y~ Lou Chicconi Assistant Coordinator Veterans Affairs LC:bc cc: Herman E. Talmadge, GA Jennings Randolph, WV Alan Cranston, CA Richard Stone, FL John A. Durkin, NH Clifford P. Hansen, WY Strom Thurmcnd, SC Robert T. Stafford, VT PAGENO="0508" 3128 STATE OF SOUTH CAROLINA DEPARTMENT OF EDUCATION COLUMBIA August 13, 1976 The Honorable Vance Hartke Chairman, Committee on Veterans Affairs United States Senate Washington, 3. C. 29015 RE: Amendment No. 2005 to S. 969 Listed herin are comments in addition to those made in my letter, July 27, 1976. SECTION 1673 Our association concurs with the provision of thissection in which the 85-15 requirement is extended to all courses offered by Educational Institutions and bans enrollment of eligible veterans, not already enrolled, in any course (excluding On Farm and Prep) in which more than 85% of the students enrolled in the course are having all of their tuition, fees or other charges paid to or for them by the Educational Institution or by grants from any Federal Agency. This concurrence is based on the addition in which discretion is allowed the Administrator to waive the 85-15 requirement in case of HEW grants programs such as Basic Educational Opportunity Grants and the Supplement Educational Opportunity Grants. Sincerely, j;7~ (~e~4~-~- Marvin P. Busbee, Chief Supervisor State Approving Section CC: Mr. Guy H. McMichael MPB/j em PAGENO="0509" 3129 AMERICAN COUNCIL ON EDUCATION ONE DUPONT CIRCLE WASHINGTON, D. C. 20036 August 16, 1976 The Honorable Vance Hartke Chairman, Committee on Veterans' Affairs United States Senate Washington, D.C. 20510 Dear Mr. Chairman: The undersigned eight higher education associations would like to comment on Amendment 2005 which you and Senator Stafford have proposed to S. 969, relating to the G. I. Bill. Most higher education associations would prefer that the G.I. Bill be continued as it is. As I emphasized in my letter to you of November 11, 1975, termination or radical alteration of the existing program would have serious social, economic and educational implications for the Nation. These implications should be thoroughly explored, and alternatives designed to replace the significant contributions of the G. I. Bill to our society, before substantial changes are made. If it is the will of Congress that the program be modified at the present time, however, the new program which would be established by your Amendment to 5. 969 seems to offer a constructive way to help meet the needs of servicemen and veterans, as well as the military. On the basis of our preliminary review of the language, we would like to indicate support for some of the principal features of the bill, as well as some serious concerns about certain changes which it would make in existing law. It should be noted that Chapter 32, creating a wholly new veterans' education program, places a considerably greater financial responsibility upon the serviceman and provides a smaller benefit. The serviceman contributes one-third of the funds; the maximum benefit after separation is $225 a month for up to 36 months, compared to $270 for a single person for 36 months under * the present law and $292 for 45 months under 5. 969. There is no additional allowance for a spouse or children, unlike the present law. We suggest that the serviceman's contribution be matched 3-1 rather than 2-1 while in service, which would maintain benefits at approximately the present level. This is particularly important because the benefit level is set PAGENO="0510" 3130 The Honorable Vance Hartke -2- August16, 1976 at the beginning of the contributory plan, so that payouts 5-10 years later after no-interest accrual would very likely be eroded significantly by inflation. Alternatively we would urge that the Secretary of Defense approve a Defense Department contribution to the plan, as the bill authorizes him to do, in order to make the benefits more attractive. We particularly applaud the provision which would extend benefits from 36 to 45 months for those now eligible, and raise benefit levels. We also support the continuation of PREP, which has helped some 350,000 servicemen and women from disadvantaged backgrounds, and is an enormously useful program which would be ended by the House-passed veterans' bill. Another desirable feature is the increase in amounts available from the loan program. The bill proposes to raise the reporting fee from the present $3-4 to $5-6. We believe this is too low. Higher education legislation now pending before Congress would provide institutional administrative fees of $15 per Basic Educational Opportunity Grant and $10 per Guaranteed Student Loan award, as well as larger fees than at present for handling other Federal student aid programs, in recognition of the administrative costs required to process the forms and to counsel and assist the student. We suggest that the reporting fee per veteran should be made consistent with other student aid programs, particularly in light of the increased administrative burdens imposed on institutions by recent VA regulations. We have strong objections to the bill's extension of the 85-15 rule, which would impose burdensome record-keeping requirements on all institutions, and would extend the oversight of the veterans' committees of Congress and the Veterans' Administration to programs within the jurisdiction of the education committees and the U.S. Office of Education. We also have concerns with several other provisions. The requirement of "last date of pursuit" could restrict the regulatory flexibility of the Veterans' Adminis- tration in a sensitive area bearing on institutional autonomy. The treatment of independent study unduly restricts the academic choices available to veteran students, as does the removal of eligibility for courses in operation less than two years at private colleges, and at public branch campuses. Our objections to these provisions, and our suggestions for changes, are detailed in the accompanying memorandum on behalf of the American Association of Community and Junior Colleges, American Association of State Colleges and Universities, American Council on Education, Association of American Universities, Association of Jesuit Colleges and Universities, National Association of Independent Colleges and Universities, National Association of State Universities and Land Grant Colleges, and National Catholic Educational Association's College and University Department. Sincerely, Charles B. Saunders, Jr. Director of Governmental Relations cc: Members of the Committee on Veterans' Affairs PAGENO="0511" 3131 Attachment to Letter to Senator Vance Hartke August 16, 1976 SUGGESTIONS BY HIGHER EDUCATION ASSOCIATIONS FOR CHANGES IN A~1ENDHENT 2005 FOR S. 969 1. Extension of 85-15 rule Current law disapproves for benefits non-standard college degree programs in proprietary schools in which more than 85 percent of the enrollment are veterans. Section 206 would extend this standard to cover any courses at all institutions, and include students whose tuition and fees are paid entirely or in part by Federal grant funds or institutional funds, in determining the 85 percent limitation. The effect of this section would be to remove the eligibility of veterans at dozens of institutions (including some of the largest state systems and some of the smallest private colleges) which enroll large percentages of low-income students. There is no academic justification for colleges and universities to impose program enrollment cutoffs on such grounds. The relative percentage of enrollment of Federally aided students has no relationship to course quality. To administer this section, institutions would have to set up burdensome and duplicative record-keeping procedures, since the percentage of enrollments of aided students would have to be established for all courses of study. We are particularly concerned with the proposed extension of the law to require counting of all students aided in whole or in part by other Federal programs or by institutional funds. This further complicates the additional record-keeping which would be necessary for all courses of study. It would also add undesirable complexity to institutional relationships with the Federal government, since it would extend the oversight of the veterans' committees of Congress and the Veterans' Administration to programs which are the jurisdiction of the education committees and the U.S. Office of Education. We urge, therefore, that Section 206 be deleted. 2. Last date of pursuit Section 507 incorporates into law the regulatory requirement that veterans' benefits be terminated as of the "last date of pursuit" of an educational program. The current regulation has produced enormous confusion due to the rigidity of some VA regional offices in interpreting the responsibility of institutions to determine~a student's last date of course participation within 30 days. In some cases, institutions have been told that they must take daily attendance, regardless of Federal prohibitions against such interference in academic policy and administration. We understand that Section 507 is intended to codify existing regulations. However, the section should be amended (with accompanying report language) to make clear that such rigid interpretations of "last date of pursuit" are unwarranted. The Veterans' Administration has recently stated that "special circumstances may require some flexibility in the interpretation of this rule. PAGENO="0512" 3132 -2- In some instances even the best school reporting system may not be capable of detecting an enrollment change as it occurs. When this is the case. . .the 30-day period may be counted from the earliest point, other than the actual date of occurance, that the school could possibly have learned of the enrollment change or termination." (Information Bulletin DVB lB 22-76-6, June 17, 1976.) The law should affirm the spirit of this statement. 3. Treatment of independent study Section 208 discourages the pursuit of full-time independent courses of study for college credit by veterans, since it provides payments for such courses on the assumption that they are pursued on less than a half-time basié. While Section 208 is intended to codify existing regulations and to address an area of serious potential abuse, we believe it is too narrowly drawn. We cannot accept the assumption that independent courses of study require less time and effort for the same degree credit. On the contrary, the general reason for choosing such a course of study (at both the graduate and under- graduate levels) is to pursue a subject in greater depth than is possible in a classroom setting. We urge that this issue be given further study, so that the safeguards against abuse do not result in limiting the options available to veteran students by discouraging their participation in legitimate independent study programs. 4. Removal of exemptions from eligibility Under current law, courses at both public and private institutions are excepted from the provision that veterans are ineligible to participate in new courses (in operation for less than two years). Section 509 would narrow the exclusions, disallowing those for private non-profit colleges and universities and public branch and extension campuses, unless in operation for over two years and offering new courses similar to old ones. This would make veteran students ineligible for innovative courses created to meet current manpower needs and improve employability, if offered at a private non-profit college, or a public branch or extension campus outside the taxing jurisdiction. This language would rule out new courses conducted by many institutions in extension or overseas programs. Such a restriction bears no relationship to course quality, and only serves to reduce the availability of near-by schooling for veterans. Therefore, we urge that Section 509 be deleted. PAGENO="0513" 3133 St. Louis High School 3140 Waialae Avenue A Division of Honolulu, Hawaii 96816 St. Louis-Chaminade Education Center Telephone 734-1904 VE~ERANS' /~FFAI~lE~ .Augus 97 n c~) 11L!Lt~:;I U WI AtJG2O197~ :~ The Honorable Vance Hartke ~1Jti United States Senator WASHINGTON, D~c. ZO~4~ Old Senate Office Building, Room 313 Delaware and Constitution Avenues Washington, D.C., 20510 Dear Senator Hartke, Re: Your letter of July14, 1976 Concerning Amendment No. 2005 to .S969 St. Louis High School has been involved in the Predischarge Education Program (PREP) since April of 1972. Through these experiences during this period we have gained considerable knowledge about what motivates a service- man to return to school and the processes of education that he responds to best. In our view PREP has been a program of outstanding value to the indi- vidual serviceman. Your efforts to continue PREP and make the attainment of a high school diploma possible should also help the military services, our nation, and hopefully your amendment will have the full support of your colleagues. The school has also gained considerable experience in working with the Veterans Administration, I certainly appreciate your letter and the opportunity to respond to your Amendment to S969 as there are three areas of extreme concern to the school ag well as recommendations we would like to make based upon our experience that may serve to strengthen the bill and PREP program. The first area of concern is that the matching fund provision in the bill may make it financially difficult for a serviceman to take advantage of PREP. An attraction of PREP to the serviceman has been that it is free and doesn't affect his entitlement. Most students enrolled in PREP programs are in the lower military pay grades and would be reluctant to assume this financial obligation. it would be very evident to a new enlistee in. need of a high school diploma or basic skill training that he would not be receiving equal treatment with his counterpart in civilian life who is able to take advantage of a free education through the conveniently located Comprehen- sive Fanployment Training Act programs or the local adult high school. The serviceman would be asked to pay for his high school education, whereas the civilian would not. If special funds are ailocated by the Department of Defense, or a system of pay check deductions involving banking and account- ing is. implemented to handle the student's matching funds, the complexities 78-226 0 - 77 - 33 (Pt. 4) PAGENO="0514" 3134 Ltr to Senator Hartke fron Fr. O'Connell, dated 8/16/76 Page 2 of this system would probably result in increased costs. Also, if the Secretary uses funds from the Departnent of Defense as an added inducement for enlistments to match the VA benefits, then a savings to the government does not actually take place. To provide maximum educational benefits at lower costs the school would recommend that Congress consider not enacting a matching fund provision for PREP nor the projected 8% increase in bene- fits. Instead, consideration should be given to establishing a set or standard tuition for all schools which is lower than the current maximum allowable where the VA would pay 100% of the tuition. Our second concern is pro rata refund. In August of 1973, the VA imposed a strict pro rata refund policy on some of the schools involved in PREP. The effect of pro rata upon St. Louis High School was that instead of receiving *the full amount of tuition for each sixty-hour course, the school actually received eleven percent less. This was due to the fact that approximately $19 was reserved for students who withdrew. The accounting procedures were complicated by the fact that many students who withdrew for military reasons later re-enrolled. Many times a pro rata refund was made only to find that the refund was not due because the VA had withheld tuition from a subsequent course. The school would, therefore, recommend that a flat tuition rate be established for PREP courses. This rate could be eleven percent less than the present rate authorized and not the tuition increase proposed. The tuition payment should be based upon the initial registration of an individual student after he has attended the first 6 hours of class, and that no refunds would be made if a withdrawal occurred. If a student withdraws, once the tuition has been paid, he would be allowed to re-enter that course at a later date with no additional charge to the VA. This one adjustment alone would save a considerable amount of money, as the lower tuition would in effect already have accounted for a refund for with- drawals; the accounting for the re-entry of previous withdrawals would be the responsibility of the school; transactions and paperwork between the student/school and the VA would be minimal and finally the VA computerized accounting system would not have to adjust to a myriad of withdrawals and re-entries which have been caused by the attempts of the military and school to maintain a system of flexible education to fit military schedules. The third concern of SLIIS is the prohibition against using the Power of Attorney. Prior to the time when the POA was authorized, this meant that the school was unable to collect thousands of dollars from the students as many became former students due to class completion, transfer, change of duty stations, illness, and other undetermined withdrawals from the program, by the time the VA check had returned to the school approximately 148 days after the course started. St. Louis High School did not have the resources to track down the students who had transferred to other stations nor were the efforts, that the school administrators made in going daily to military units to get checks endorsed, appreciated by the commanders. In most in- stances, an administrator's entire day involved contacting students to get PAGENO="0515" 3135 Ltr to Senator Hartke from Fr. O'Connell, dated 8/16/76 Page 3 the proper endorsement on the check. Since the money was not going to the student for subsistence the student, unless he was preparing to graduate, was not interested in making any great effort to endorse checks over to the school. I believe that the original prohibition against the use of a Power of Attorney was to protect the veteran and to keep him from assigning to a third party his "subsistence allowance", which in many instances was the veteran's only means of support. PREP benefits are designated as tuition rather than subsistence. The fact that PREP programs are controlled by the educational services officers who must endorse the VA PREP application forms and the commanding officers or his designees who must endorse the limited Power of Attorney would seem to ha an appropriate safeguard against the abuse of the use of a Power of Attorney by the school. If a close analysis is made of these recommendations, the school strong- ly believes that the Senate committee will discover that considerable savings will accrue to the government through lower tuitions and a simplification of the PREP system and its procedures. In addition to making the above recom- mendations, the school would like to have the Senate note that PREP is con- .siderably different from the college degree, correspondence and technical school programs. Basic educational skills necessary for survival in a tech- nological society should be provided to all those who lack these skills. College degree programs are in many respects exclusive to those few who need a higher level of academic training or those who wish to attempt to achieve a higher form of education for personal reasons. It is generally accepted that this individual will pay for his college education while it is not ex- pected and in most instances not possible due to a lower income for those lacking in the basic survival skills to pay for their education. PREP is conducted on military installations and classes usually conform to the stu- dent's duty schedule. It is desirable to know that the program has maximum flexibility to meet the ever changing patterns common to duty assignments. Breaks in schedules occur because units go to the field on training exercises or ships deploy to the far reaches of the earth. Under present VA rules, the expected re-entry of students is not always an easy proposition as new regis- tration forms must be generated to dis-enroll and re-enroll and mew tuitions requested as others are paid back. Most of the present VA rules governing college degree, correspondence and technical school training are not easily applicable to PREP, As am answer to your question concerning the continuation of PREP under the VA, the school would unequivocally endorse the continuation of PREP under the auspices of the Veterans Administration. To shift this responsibility on to another federal agency at this time would require that an entire new sub- agency, with new rules and regulations be established to administer the pro- gram when in fact an agency (VA) already exists. With a few minor modifica- tions to the present VA rules and regulations PREP could function very well under the VA. PAGENO="0516" 3136 Ltr to Senator Hartke from Fr. O'Connell, dated 8/16/76 Page 4 On behalf of St. Louis High School and myself, I sincerely appreciate the consideration you have shown in providing us the opportunity to respond to your Amendment. You are to be coimnended for your interest in military education and your efforts to resolve the present Impasse over the GI bill. If you have any further questions concerning our reconinendations, I would be happy to meet with you in Washington, D~C. to discuss these. Sincerely, 3r~i4227 Father William A. O'Connell, S.M. Principal WAO' C/da cc: Dr. Roger Richter Mr. Robert Lawson The Honorable Daniel Inouye The Honorable Hiram L. Fong The Honorable Patsy T. Mink The Honorable Spark 14. Matsunaga PAGENO="0517" 3137 EMPIRE STATE COLLEGE OFFICE OF STUDENT SERVICES STATE UNIVERSUY OF NEW YORK SARATOGA SPRINGS, NEW YORK 12866 TELEP)40840: (518) 587-2100 Senator Vance Hartke Chairman Senate Veterans Affairs Committee United States 6enate Washington, D.C. 20510 Dear Senator Hartke: August~ 16, 1976 I have read with interest your proposal for a "Veterans Education and Employment Assistance Act of 1976" and wish to express my support of the effort you are making on behalf of the veterans. I was particularly pleased with your amendment of Section 208, Section 1682 of Title 38, United States Code in which you extend full educational assistance allowance to eligible veterans pursuing an independent study program which leads to a standard college degree. If I under- stand it properly, this amendment will nullify the regulations of the Veterans Administration which provides only limited assistance to those who pursue their education through an independent study program. The Veterans Regulation which limits support for independent study to less than half-time is unfair to those veterans who, due to family and job responsibilities, must pursue their education through an independent study program and for those veterans who find this mode of study to be a more effective approach than that provided by conventional programs. At the time Mr. Roudebush proposed the present regulations pertaining to independent study programs, we wrote to him pointing out how unfair it was to penalize veterans who chose to pursue their college education through independent study. Our efforts were to no avail and I am very pleased that your amendment has reopened the possibility of eliminating this most unjust regulation. xc: James W. Hall Senator James. Buckl~y Senator Jacob Javits Sincerely, 7 Dean of Student Services PAGENO="0518" 3138 STATE OF SOUTH CAR~0LINA DEPARTMENT OF EDUCATION CYRIL B. BIJSBEE COLUMBIA August 16, 1976 The Honorable Vance Hartke Chairman, Committee on Veterans Affairs United States Senate Washington, D. C. 20015 Dear Mr. Hartke: Regarding: Amendment No. 2005 to S 969 an Schools are required to submit/application to meet the requirements of measuring on a credit hour basis indicating: 1. Total length in clock hours and credit hours. 2. Credit hours per quarter on semester. 3. Class, laboratory and shop hours per week. 4. A statement that academic portions of such courses must require outside preparation. 5. Show curriculum as listed in two and three above per quarter or semester. 6. Summarize hours per day and attendance requirements for all students. For all practical purposes, this is meaningless. The Veterans Administration will pay full time allowances any time the enrollment certification indicates a minimum of twelve credit hours and twenty- two clock hours. PAGENO="0519" 3139 The Honorable Vance Hartke Page 2 August 16, 1976 I an suggesting that serious consideration be given to eliminating this paragraph in 1788, and making necessary changes in 1788 (a) (1) to change 30 hours to 22 hours arid in (a) (2), to change 25 hours to 18 hours. Sincerely, f~4~ . arvin P. Busbee, Chief Supervisor State Approving Section MPB/db CC: Guy McMichael PAGENO="0520" 3140 ~ ~iate ~ni~n~rEiiig mez~a~ 372133 OFFICE OF THE PRESIDENT August 16, 1976 Senator Vance Hartke United States Senate Washington, D. C. 20510 Dear Senator llartke: Your letter of July 11+, 1976 has been received, together with the Congressional Record which carries an Amendment to the `Veterans Education Employment Assistance Act of 1976." As noted in the Record the Amendment is known by number 2005. This office has carefully analyzed the several titles and sub-sections of the original act and the act as amended. By and large your Amendment is acceptable. From an educational perspective one would encourage strongly the con- tinuation of G. I. Bill post-service education, yet not to the degree that such education should not undergo change in provision. Your provision of change which appears to grant improved attention to Veterans of the Viet Nam campaign receives endorsement from this University. For a number of years this University, along with other regional Universities, has administered a pre-dlscharge education program on the Fort Campbell Military Base. Pre-discharge enrollment for this University alone amounts to several hundred each year. As we understand your Amendment, the pre-discharge education program is to be left fully intact. We consider your position in this matter greatly significant to the field of education. With respect to both the 0. I. Bill as amended and PREP, this University wishes to be of record in saying that benefits to enrollees are exceptionally limited in a period of rampant inflation and that you should weigh every consideration for making certain that Amendment 2005 provides the necessary year to year inflationary adjustments. PAGENO="0521" 3141 Senator Vance Hartke August 16, 1976 page 2 Thank you for sending this important n~terial to us for review. We indeed regard you as a friend to education, and should we be able to help in further Iratters calling for educational resolve your request will be welcome. Sincerely, * LLp'/L4~ Frederick S. RUirpbries President Tennessee State Tihiversity FSH:h PAGENO="0522" 3142 WAYNESVILLE R-VI SCHOOLS WAYNESVILLE, MISSOURI 65583 LAVEGA CLAIBORN 314.774-6121 Superintendent V~. ~ August 18, 1976 AUG 231976 The Honorable Vance Hartke Senate Office Building Washington, D. C. 20510 Dear Senator Hartke: As the superintendent of this school district I was pleased to receive a copy of your committee's "Veteran's Education and Employment Assistance Act of 1976." Our PREP staff, along with our administrative staff, have studied the proposal and submit the following comments, restricted to those provisions which seem to pertain to our operations: 1. The $2.00 increase in the reporting fee paid to institutions for each veteran enrolled is an appropriate amount for both our PREP and our vocational programs. 2. The increased educational assistance rates are considered to be well merited, considering the increased cost-of-living in this area. 3. It is our assumption that a veteran who "participated" in the program would be eligible to participate in PREP without reducing his entitlement? as under previous Acts. 4. It is also our assumption that a member of theArmed Forces must be "participating In the program" before he may enroll in PREP and that participation in PREP will not reduce his entitlement as of that enrollment nor reduce his future entitlement. 5. The amendment to Sec 701, Section 3101(a), of Title 38, U. S. Code, prohibiting and defining an assignment of an educational assistance allowance will present a dilemma for our PREP operation. The majority of our PREP students would not be able to pay their tuition from their own resources. For a variety of reasons, approximately 15 percent of our PREP students do not receive their education allowance checks during the period for which enrolled. Of these men, many are discharged from the Army before the check arrives. PAGENO="0523" 3143 The Honorable Vance Hartke Page2 August 18, 1976 You specifically asked for our coninents concerning the continuation of the PREP program under VA's jurisdiction. We are certain It would be adminis- tered adequately under DOD. We feel that VA has established policies and pro- cedures which are effective. We feel strongly that the "State Approving Agency" concept is very beneficial to both the VA and to the schools. Here in Missouri that agency is in the State Department of Education and is staffed with educators. It would appear that all portions of the Veteran's Education and Employment Assistance Act of 1976 would be better administered by one than by two federal offices, i.e., keep PREP with the other portions. I will fordard the same information to our Congressional delegation and urge them to support your proposal. / Sincerely, L. laiborn Superintendent of Schools djb PAGENO="0524" 3144 AMERICAN PBEI~R~)RY INSTITUTE Post Office Box 786 August i~9jWi ~ rir~r~ MU~2'R1Q7~ The Honorable Vance Hartke, Chairman Veterans Affairs Committee United States Senate Washington, D.C~205l0 Dear Senat6r Hartke: Last fall when the H. R. 9576 was passed, I felt that the House had made a serious mistake. I am pleased that you and Senator Stafford are proposing Amendment No. 2005 to S. 969. As a World War II veteran who~Ióök~adyantage of Veterans benefits for part of my graduate education, I fè~ei an obligation to urge that some type of educational benefits be continued for all veterans. While I can't place an actual dollar value on it, it is my belief that the additional money I have paid in taxes based on the greater earning power produced by my education has more than repaid what it cost the taxpayers. If this is true in my case, I think it is also true for the majority of those receiving veterans educational benefits. True, there are always some free-loaders who find a way to "beat the system" and I think every effort should be made to avoid this, however, more publicity should be given to the success of the program. My second interest in your Amendment is generated by my position as Superintendent of the school which operates the PREPprogram for Fort Hood, Texas. In the two year period during which we have been offering a diploma completion program, over 1,500 soldiers have completed requirements and have received their high school diploma. In addition, approximately 500 have successfully challenged the G.E.D. examination and have been given the High School Equivalency Certificate by the State of Texas. A recent follow-up study of some 270 of the graduates indicated that approximately 30% were continuing their education either through the military Tuition Assistance program or as civilians under veterans benefits. I know a number of these students personally and have had reports from their teachers while they were in school or from their company commanders or first PAGENO="0525" 3145 sergeants concerning increased motivation toward improved performance. One example: a young man who grew up in the ghetto of Detroit became `turned on" by the educational program, graduated from our school and is now studying law enforcement at a junior college under Tuition Assistance. This man was on the verge of being discharged as an undesirable soldier before entering PREP. His company commander now says his only complaint with the man is "he wants to go to school all the time." How much is it worth in dollars to turn one individual around and head him in the right direction? I'm sure I don't know the answer to that question but I do know that if educational benefits such as PREP are discontinued it will be a tremendous loss to the Nation. Your closing remarks in the Congressional Record in which you quote -Secretary Rumsfeld need to be heard by anyone who contemplates termination of educational benefits. My own experience in talking with many soldiers at Fort Hood verifies your statement. Educational benefits were instrumental in recruiting many of them and, had the benefits not been available, they probably would not have enlisted. Thank you and Senator Stafford for your efforts toward retaining veterans educational benefits. I will write members of my congressional delegation to enlist their support for your amendment. Sincerely, ,1 ~ `,~ ~ L. K. Requa~Ed.D. Superi ntendent PAGENO="0526" 3146 GEORGIA VETERANS ASSOCIATION Rim 224 Academic Building University of Georgia Athens, Georgia 30602 Ph. 404-542-5816 August 19, 1976 Honorable Vance Hartke Senate Office Bldg., Roan 313 Russell Washington, D. C. 20510 Dear Senator Hartke, I appreciate your correspondence concerning your Amendment 2005 to your Bill, 5. 969. As President of the Georgia Veterans Association I feel it is my. responsibility to stay informed of all pending legislation which might have some effect on the veteran population at the University of Georgia. This piece of legislation which you have proposed covers several areas of concern to veterans and dependents presently utilizing their G.I. Bill educational benefits. Of primary importance is the inequality of the restriction on the nine month extension, prohibiting graduate students and all dependents from enjoying the same benefits that are available to undergraduate veterans. Since over 42% of our G.I. Bill recipients are not eligible for the extension as it now stands, I believe it is necessary to reiterate the inequality of the legislation presently in effect. This is just one area of concern that your amendment would rectify. The proposed 8% increase in benefits, although appreciably below the changes in the Consumer Price Index since the last increase in September 1974, would be welcomed by all educational benefit recipients. An increase more reflective of the actual cost-of-living increase would be of greater benefit to veterans and dependents, and I would hope that a more generous increase could be forthcoming in the near future. Also, the increase in the amount of educational loan to $12,000, the establishment of the Post-Vietnam Era Veterans' Readjustment Assistance Program and the other proposed measures would help create a more streamlined program that would be more in tune with the needs of a volunteer, peacetime military. PAGENO="0527" 3147 Honorable Vance Hartke Page 2 August 19, 1976 In response to your offer of assistance, there is one area that you or your staff could help. To enable me to completei~ respond to inquiries by veterans and dependents concerning their educà- tional benefits I need to be fully aware of all current and pending legislation concerning veterans entitlements. If your staff could send me copies of all veterans legislation, both current and proposed, it would enable me to fulfill my obligations to the veterans and dependents in providing more complete and precise responses to their inquiries. Sincerely, ~2~9Jdi~/4~ui42o Gerald S. Spears President Georgia Veterans Association PAGENO="0528" 3148 Bryant & Stratton August 19, 1976 Honorable Vance Hartke, Chairman ~ Committee on Veterans Affairs C U. S. Senate Russell Senate Office Building Suite 414 Washington, DC 20510 Dear Senator Hartke: We are writing you to express our concern over four (4) technical amendments contained in your Hartke Amendment, which would amend the existing G.I. Bill and would establish a new program called "The Veterans Education and Employment Assistant Act of l976"--S969. The first of these amendments has to do with the expansion of the 85-15 ratio rule, veterans to non-veterans enrolled in programs to all participating institutions. It further changes the universe of students on which the ratio is based. We submit that this amendment is too restrictive and regressive and would cause many programs offered in schools of higher education to be terminated because the schools couldn't operate the programs under these terms. The veterans would suffer greatly because of the elimination from many schools of programs that have been popular and useful for the veteran. Our next concern is contained in Sections 207 and 307 which would amend Sections 1674 and 1724 of the law so that a veteran could be considered not progressing at a satisfactory rate if, in any particular semester, the veteran is enrolled for a fewer number of credit hours than would permit such a veteran to graduate within the approved length of the course. We feel this provision is much too directive and dictatorial because it concerns itself too greatly with judgment areas that can only be evaluated and decided on satisfactorily by the respective institution of higher learning where veterans are enrolled. The third problem area concerns Section 509 which would amend Section 1789 of the law so that the present exception to the prohi- bition of approval of programs in operation for less than two years would be inapplicable to public, tax-supported branches, or extensions located outside the area of the taxing jurisdiction. The same exception to the two-year rule for private, non-profi.t colleges would be substantially narrowed so that it would be available only to a branch or extension located within normal commuting distance of the institution. This proposed restriction bears no relationship Bryant & Stratton Business Institute, 1028 Maw Street, Buffalo, New York 14202 (716) 884-9120 Accredited by the Accrediting Commisuon of the Association of Independent colleges and Schools PAGENO="0529" 3149 Honorable Vance Hartke August 19, 1976 Page 2 to course quality, infringes on academic policy making, and reduces the availability of nearby schooling for veterans. The fourth amendment contained in Section 701 of the Bill would amend Section 3101 (a) of the law so that where a veteran has designated the address of an attorney-in-fact for purpose of receiving the benefit check, and has also executed a power-of-attorney for the negotiation of the check, such action by the veteran would be deemed an assignment and would be prohibited. This represents a proposed rescinding of the rights given to do so provided in the law of 1972 and again represents an invasion of the right of the individual veteran to exercise this free choice of action for his own convenience. We respectfully request your reconsideration of these amendments, which we feel are too regressive and would have a great negative effect on the present G.I. Bill and the entire veteran educational program. Vice President for Public and Administrative Affairs jmj 78-226 0 - 77 - 34 (Pt.4) PAGENO="0530" 3150 RUtLEDGE COLLEGE P. 0. Box 5009, Greenville, S. C. 29606 r~S August 19, 1976 ~ -~r~3' ~ Senator Vance Hartke Chai~an 2~' Senate Veterans Affairs ~onunittee \ Russell Office Building Room 414 ~ Washington, D. C. 20510 Dear Senator Hartke: As a member of the Region IV Advisory Committee for Proprietary Schools, I was selected during our meeting on August 10, 1976 to write you and express our concerns regarding the Harke Amendment Number 2005 to S.969 which is called the Veterans Education and Employment Assistance Act of 1976. We support the amendment and consider the majority of the proposed legislation to be excellent. However, there are three areas of the amendment which are causing us concern, and we believe they need further study and scrutiny before the bill is reported out of committee. First, the 85/15 ratio contained in Section 206 and would amend Section 1673 of the law should be deleted completely as it is now stated. This section could have a profound impact on many colleges, schools and students across the nation. It is our opinion that there is riced for control, but this particular provision duplicates the Standards of Progress which are now in force by the State Approving Sections. In addition, we feel the fifteen percent should include all non-veterans regard- less of the method of tuition payment, which Section 1673 of the present law provides. Therefore, it is the opinion of our committee that the present Section 1673 of law has adequate control along with the current Standards of Progress enforced by the State Approving Sections. Our second concern is in regard to Sections 207 and 307 which would amend Sections 1674 and 1724 of the present law. The amended sec- tions require a fifteen semester hour load to be considered a "full- time student.' This would be true regardless of the language of Section 1788 of the law which permits consideration of a full-time course to be twelve semester hours. Therefore, it is our opinion that the amended Sections 207 and 307 are unfair to the student and that a twelve semester or twelve quarter hour load should be con- sidered sufficient course work for a student to be classified full time. Our veteran students are holding down full-time jobs and a twelve-hour course load is a reasonable full-time load~ A Two Year Co-educational College of Business PAGENO="0531" 3151 Senator Vance Hartke, Chairman August 19, 1976 Page 2 The third concern we have regarding the bill is Section 509 which would amend Section 1789 of the law regarding extensions and branches. It is our opinion that a "grandfather clause" protection provision should be included in the bill for all extensions and branches currently in operation. We request that the various educational accrediting commission representatives be given the opportunity to appear before the Veterans Affairs Committee to discuss the full in~act of these three provisions of the bill. We thank you for your interest and would hope that you will evaluate the three provisions noted above and support the changes suggested. Sin erely, James R. Couch, Ed.D. Region IV Advisory Committee For Proprietary Schools JRC:ee PAGENO="0532" 3152 ASSOCIATION of INDEPENDENT COLLEGES and SCHOOLS 1730 M STREET, NW. WASHINGTON, D. C. 20036 202/659-2460 Of/ke of G,e~o1Co'~ooeI August 24, 1976 The Honorable Vance Hartke Chairman, Committee on Veterans' Affairs United States Senate Washington, D.C. 20510 Dear Senator Hartke: This is in response to your invitation to comment on Amendment Number 2005 to S.969 submitted by you and Senator Stafford concerning veterans education and assistance. Our remarks fall into two general categories. First, we would deal with your new post-Vietnam program. Seconc~, we would comment upon proposed amendments to the administration of the present program. PROPOSED NEW POST-VIETNAM PROGRAM Certainly, it is a political consideration properly the prerogative of the Congress to consider whether or not as a matter of public policy the presently constituted "G.I. Bill" should be abolished. We think it would be unfortunate for the veteran, the Armed Services, and the nation, itself, to lose this singularly successful program. However, if that program is fated for extinction, then by way of general principle, your "Post-Vietnam Era Veterans' Readjustment Assistance Act of 1977" (Title IV) represents a good faith approach to dealing with a continuing need for veterans' education. We consider it most unfortunate that time has not permitted the holding of hearings on this important newly proposed program. Our initial reaction to the proposal is that it has some very worthwhile features. Two serious ommissions, in our view, are that it neither provides for part-time study, nor is there additional subsistence for a veteran with spouse or dependent children. We hope these particularly can be remedied. Further, we question only the level of financial support under the proposed program which would be less than the present program. We suggest that the Department of Defense, instead of being a discretionary cdntributor, should be required to contribute the same 2-for-i basis as would the Veterans' Administration for a total of 4-i. Possibly, Commerce should sponsor the Coast Guardsmen. PAGENO="0533" 3153 TECHNICAL AMENDMENTS TO PRESENT PROGRAM There are a host of what might be called "technical ~ to the existing law upon which we feel appropriate to comment. These include: 1. The 8% increase in the monthly training allowance is a welcome recognition of the impact of inflation. 2. Similarly, the increase from $600 to $1200 for the maximum annual educational loan amount is a realistic recognition of the true costs of education. 3. The extension of benefits for those now eligible from 36 to 45 months, along with the continuation of the PREP program, is most worthwhile and we hope will survive any Senate-House Conference. 4. While any increase in the reporting fee paid to institutions is welcome, we urge that the Committee review the institutional cost reimbursement proposals in S.2697, the Higher Education Amendments of 1976, which provides $15 per student on the Basic Education Opportunity Grant program and $10 per student for the Guaranteed StudentLoan program. Hence, we respectfully suggest that the proposed increase of $2 per veteran student reporting fee does not sufficiently recognize the administrative costs of the program to the institution as is recognized by other student aid programs. At a very minimum, we suggest $10 per student reporting fee. 5. In response to your suggestion in your letter of July 7, 1976, we have been in contact with Committee Counsel, Guy McNichael, concerning the proposed definitions for an "institution of higher learning" and a "standard college degree." It is our understanding that the intent of these two statutory definitions is to incorporate into the law the present regulatory intent and the administrative decisions of the V.A~ concerning these two definitions. We understand you have been informed by the V.A. that collegiate accreditation and candidate status granted by the Accrediting Commission of the Association of Independent Colleges and Schools has the recognition of the U.S. Office of Education and is accepted by the Veterans Administration for purposes of these two important definitions. Further, the Veterans Administration and Mr. McMichael have prepared language which PAGENO="0534" 3154 would be substituted for the present language in the measure as introduced so that present V.A. practice with regard to collegiate accreditation and candidate status accorded by A1CS and accepted by the V.A. would remain unquestioned and in full force and effect. We have been assured of this in- tention by your General Counsel, ?4r. McMichael. 6. We understand that there have been, from the viewpoint of the Committee, problems of administration as It would make benefits available for veterans engaged in full-time independent * courses of study for college credit. We suggest that the proposed treatment of the matter in Section 208 of the measure fails to take into account changes and innovations currently practiced in good faith at institutions of probity sponsoring professional programs of education of the highest integrity. We feel this subject is worthy of special hearings by the Committee before flexibility is foreclosed. For the present, we would limit this observation not to occasional courses of study but to completely professional level training at the post-baccalaureate level. 7. We suggest that Sections 207 and 307 of the measure may be too inflexible in requiring a minimum level of progress for each semster so that, in effect, the language of Section 1788 of the law would be amended to require a full-time course to be more than 12 semester hours. We suggest that the necessity for a finding by the Administrator of "mitigating circumstances" is unduly burdensome, time-consuming, and may constitute a direct involvement by the federal government in the internal institutional involvement by the federal government in the internal institutional administration of academic programs. Additionally, it would appear that the proposal would affect an otherwise excellent student who may have failed or dropped as little as one course in a particular semester or quarter, and yetmay have completed satisfactorily at least 12 credit hours. Indeed, the concept of "progress" takes on a new dimension by this proposal. We suggest it be eliminated or, at the very least, the language be amended to permit a more simplified post-audit evaluation of the veterans rate of progress by the institution and for which the institution would be accountable instead of the onerous and ominous consequences of a finding of "mitigating circumstances" by the Administrator. PAGENO="0535" 3155 8. In a very narrow sense, Section 509 of the measure dealing with courses offered by a branch or extension is not applicable to proprietary, for-profit (tax-paying) educational institutions because the exceptions of part (b) to the prohibitions of part (a) of Section 1789 are applicable only to public, tax- supported institutions and proprietary non-profit educational institutions. Thus, we think it is particularly appropriate that Section 509 of the measure should include at page 43, line 3, the additional words: non-profit, to be inserted after the word, proprietary. Indeed, it may be most appropriate for the Committee to remind everyone that for purposes of the V.A. statutes, the term, proprietary, is generic in nature and includes all institutions which are not public. Thus, both "non-profit" and "for-profit" as the terms are commonly accepted, are included in the generic term, proprietary. This is, of course, in contrast to Section 491(b) of the Higher Education Act of 1972 as amended, limits the use of the term, proprietary, to so-called "for-profit (tax-paying rather than tax-avoiding or tax-consuming)" institutions. It would prove a hardship to the veteran and an unwarranted limitation on institutional flexibility if collegiate proprietary, non-profit institutions are denied the necessary flexibility to respond.to varying veteran and community needs. If the proposal of Section 509 is adopted, it would make inapplicable through a new Section (c) the exception of subsection (b) to the general prohibition of Section (a) of Section 1789. If there is a particular ad hoc problem which the Committee feels should be treated directly, we respectfully suggest that such so-called problems may have already acquired the necessary two years of antiquity. Hence, the general pro- hibition of Section 1789 may not be invoked, and therefore, no limitation or inapplicability proposed by the present measure to the exception of the general prohibition does not address the problem. If the problem is one of program supervision and administrative responsibility, we suggest that it be addressed directly rather than obliquely. One of the essential elements of the 0.1. Bill, as distinguished from the requirements of tax legislation, is that, with the very narrow exception of refresher training, G.I. education must be geared to prepare the veteran for a vocational skill or the educational credential which he does not now possess. The converse is, of course, true to qualify for tax deductibility under IRS statutes. Section 509 would, thus, effectively PAGENO="0536" 3156 make veteran students ineligible for the needed innovative courses and programs indicated by shifting manpower needs for the reason that they are not two years old. The antiquity of the course may, as a practical manner, be inversely related to the quality of the program and the immediate needs of the veteran student. As drafted, we must express our opposition to Section 509. 9. Our opposition to Section 206 which would both expand the types of institutions embraced within the 85-15 ratio and materially reconstitute the universe on which such a ratio would be computed is most vigorous. (a) As distinguished from other federal education programs which generally define student and institutinal eligibility, the G.I. Bill is cast in terms of course or ~~ogram approval. From a vocational or occupational vantage, this is probably more easily articulated but from an educational credential vista, such as a standard college degree granted by an insti- tution of higher learning, the interface is more remote and less subject to quantification. Hence, we suggest that what- ever may have justified such a ratio of veterans to non-veterans in more simplistic courses or programs is not fairly subject to reasonable administration at the college level. Further, it is subject to the shifting needs of the veteran, the community, and employers which could serve to deny a veteran of his entitlement. Such a prohibition at the college level fails to take into account the varying student profiles served by the differing varieties of collegiate institutions. Collegiate institutions with their many courses and programs would have an undue burden in trying to account for the numbers of veterans and non-veterans in multiprogram and multicourse offerings. There is no academic relationship to the proposed cut-off of enrollments, nor is it related to educational quality at the collegiate level, without admitting that there is at below-college level. (b) To expand the universe of students upon which the 85-15 ratio would be computed is to make a change in the law without investigating or admitting the full consequences of the language implications. Not all "grants" are the result of the same public policy. By way of example, the Supplemental Educational Opportunity Grant (SEOG) is the disbursement of federal funds through an institutional prerogative of whichthe student is an incident. On the other hand, the Basic Educational Opportunity Grant (BEOG) is an entitlement of the student and the institution is the object of his discretion. PAGENO="0537" 3157 The Committee may wish to examine the proceedings of the House Rules Committee for an interesting determination as to whether or not the Guaranteed Student Loan program is an "entitlement" snd, hence, a "grant", or whether the Basic Educational Opportunity Grant is determined not to be a grant in current congressional legislation dealing with higher education. Further, we suggest that the Committee may not have taken into account the host of dependent, survivor, student "grants" in such diverse programs as Social Security, Civil Service, Railroad Retirement, Black Lung, Longshoremen and Harbor Workers, and indeed, veterans dependents' survivor grants. We suggest that to change the universe on which the 85-15 ratio would be computed fails to take into account the varying purposes, philosophies, entitlements, and discretions of a host of different student grant programs under the jurisdiction of committees other than the Veterans Affairs Committee. The record-keeping and accounting for students under such a requirement would be onerous and expensive in the extreme dimension. In effect, it would shift the computation from the know universe of veterans to making sure that at least 15% of all students in each course or program would be "cash customers" or at least privately financed. This, of course, would add an additional facet to the already complex relation- ship of all postsecondary educational institutions to the federal government. We most strenuously object to any changes in the present 85- 15 ratio either in the area of the type of institution to which it would apply or the universe of programs and students on which it would be computed. CONCLUSION In summary, we are tempted to speculate that much of the inhibitory language which has been described as "amended to prevent or reducing abuses under the G.I. Bill program" is an attempt to do indirectly that which might be socially unacceptable or politically inappropriate if attempted directly. If the Committee is of the opinion that that motive of some veterans using educational benefits is undesireable, then we respectfully suggest that the Committee address itself to developing statutory and regulatory techniques of identifying acceptable or un- acceptable degrees of G.I. Bill benefits motivation rather than mere PAGENO="0538" 3158 intention to utilize educational benefits. The proposals of the measure unfairly burden those veterans and those institutions which certainly could pass muster in any analysis of motivation into "acceptable and unacceptable" presuming such analysis could be valid and constitutionally developed. We do not think it can and we do not indulge in such presumption. If there are administrative weaknesses in the program, then let the administrators of the program act responsibly and be accountable to the Congress rather than burdening the program with inflexible statutory prohibitions and mandates unfair to the veteran and the school. Similarly, we are concerned that the necessary division between statutory and regulatory language and needs may become blurred in an abundance of good intentions. Further, we suggest that statutes themselves should be explicit and self-contained. Admittedly, legislative committee reports can be helpful to explain what is in the statute, but WE ARE WORRIED THAT THERE IS THE POSSIBILITY THEY MIGHT BE RELIED UPON TO IDENTIFY THAT WHICH MIGHT NOT BE IN THE STATUTE. We hope that any revisions of the administrative sections of the law dealing with the present G.I. Bill be sufficiently explicit to avoid the murky areas of extended controversy of legislative intent. We appreciate very much the opportunity of expressing the views of the Association on your amendment. We share your concern for the elimination of abuses and for the continued availability of educational benefits for veterans. We hope that both worthwhile goals can be achieved forthrightly and candidly. We sincerely hope that our comments can be of assistance to you in arriving at a constructive Committee Report supportive of an amended version of your proposed amendment. We must reaffirm our regret that the present G.I. Bill may have a limited future. We applaud your efforts to identify and supply a constructive and meaningful substitute program. Sincerely, Richard A. Fulton General Counsel RAF:at cc: all members of the Committee on Veterans' Affairs PAGENO="0539" 3159 STATE OF SOUTH CAWLINA DEPARTMENT OF EDUCATION S COLUMBIA August 24, 1976 The Honorable Vance Hartke Chairman, Committee on Veterans Affairs United States Senate Washington, D. C. 20015 Dear Mr. Hartke: Regarding: Amendment Number 2005 to S 969 This is an additional comment to comments previously submitted on July 27, 1976, and August 16, 1976. Section 1789 Our Association has always opposed the removal of the two year restriction as contained in this Section. During our 19th Annual Conference, San Francisco, California, August 14-17, 1966, the following report was adopted: "An effort is being made by schools which establish branches in different parts of the country, to have the two year limitation removed for branch schools if the parent school has been in operation for a considerable period of time. Committee members expressed opposition to this move and favored leaving regulations as they are." Personally, I have only one objection to the revision as stated in Section 1789 (c) (2), which states, "A proprietary institution where the branch or extension is located beyond the normal commuting distance of such instituti~ons." Normal commuting distance has been defined by the Veterans Administra- thn as "means to serve same community and draw students from community." The regulation further states that distance is not defined in actual miles and normally, not more than 30 miles and ordinarily much closer than 30. PAGENO="0540" 3160 The Honorable Vance Hartke Page 2 August 24, 1976 The key to the definition is serving the same community. The same community can be defined as a geographical area which is served by a municipal government with a mayor, etc., or it can be defined as a geographical area with several nearby municipalities with their own governing bodies, or it can be defined as an entire state. It appears to me that a definition for normal commuting distance should be included in the law and the definition should not be am- biguous but should be so specific that State Approving Agencies in all of the states would have a clear path to follow. Normal commuting distance in terms of miles, which has been ruled out by the Veterans Administration, with unspecific limitations such as not more than 30 miles, and normally closer than that isa general statement which can mean almost anything. It appears to me that a definition of normal cummuting distance could be along the lines as serving the citizenry a specific location with a specific governing body which includes nearby areas without a govern- ing body, but does not include a specific area in another location with a specific governing body. Again, may I say. the normal commuting distance will cause a tremen- dous amount of problems for State Approving Agencies. Sincerely, arvin P. l3usbee, Chief Supervisor State Approving Section MPB/db CC: Guy McMichael PAGENO="0541" 3161 Fairfax County Public Schools 10700 Page Avenue, Fairfax, Virgin~~~30 August 24, 1976 The Honorable Vance Hartke Veterans Affairs Committee United States Senate Washington, D. C. 20510 Dear Senator Hartke: Thank you for providing a copy of your proposed amendment to the Veterans' Education and Employment Assistance Act of 1976. Fairfax County Public Schools has offered a PREP program at Fort Belvoir for the past three years. I am pleased to see that your amendment pro- posed to continue the PREP program. The program has enabled us to extend educational services to servicemen residing in our area with Veterans Administration support. One major concern that I have is under Title VII - Section 701. If I in- terpret this correctly it would prohibit the use of the Power of Attorney to negotiate checks sent to the school in the serviceman's name. Since many of the servicemen who enroll in the PREP classes have completed, and in many cases have been transferred to other stations before payment is made by VA, the elimination of the use of a Power of Attorney would create a difficult problem in collection of tuition. I believe that a provision should be retained to allow for use of the Power of Attorney, or that the law be changed to permit payment of tuition directly to the school. Please advise me if I can be of further assistance. Sinc y, m Davis D ion Superintendent PAGENO="0542" 3162 VETERANS or FOREIGN WARS OFTHC UNITED STATES August 26, 1976 WIISHINGTOR,D. C.s0002 The Honorable Vance Hartke Chairman Committee on Veterans' Affairs United States Senate Washington, D. C. 20510 Dear Mr. Chairman: Having been advised a mark-up session with respect to S. 969, the "Veterans Education and Employment Assistance Act," as amended, will be held on September 1, 1976, it is incumbent upon me to bring to your attention certain resolutions passed by our 77th National Convention. They are as follow: Resolution No. 601, entitled, "Veterans Administration Programs," which, in paragraph 11 of the "RESOLVED" clause, calls for a cost-of-living increase in VA benefits. Resolution No. 614, entitled, "Permit Postgraduate Studies Under Public Law 93-508." Resolution No. 618, entitled, "Veterans Employment Laws." Resolution No.6244, entitled, "Veterans Preference in Federally Funded Programs." Resolution No. 638, entitled, "Strengthening Veterans Rights under CETA." Resolution No. 639, entitled, "Extending Re-employment Rights of Veterans." Resolution No. 640, entitled, "Implementing Veterans Employment Laws." Resolution No.665, entitled, "Assistant Secretary of Labor for Veterans Employment." Resolution No. 670, entitled, "Increase Veterans Participation in CETA." Resolution No. 680, entitled, "Veterans Preference under CETA." Resolution No. 687, entitled, "Assure Veterans Preference under CETA." Resolution No. 691, entitled, "Training and Employment for Veterans." PAGENO="0543" 3163 Resolution No. 695, entitled, `Veterans Educational Assistajice." Resolution No. 697, entitled, "Proposed Peacetime GI Bill," opposes any peacetime bill funded in whole or in part by the VA, but supports such bill if funded in its entirety by the Department of Defense and active-duty members of the Armed Forces. Informal information indicates an anendment~ may be introduced to further extend the delimiting date for educational benefits under chapter 34, Title 38 of the United States Code. Our current V.F.W. Resolution No. 695, entitled, "Veterans Educational Assistance," opposes any further extension of the time limit for the completion of education under the provisions of chapter 34, Title 38 of the United States Code. In addition to the rationale set forth in our resolution, most of those affected by the May 31, 1976 cut- off are post-Korean Conflict veterans, peacetime veterans. It is germane to the issue to note that 793 of these veterans are over 65 years of age; 8,219 are veterans between the ages of 55 through 64; 20,684 are between the ages of 45 through 54 years; and 324,379 are between 35 and 44 years old. In other words, 74 percent of the veterans who will benefit by the further extension of the 10-year delimiting period are well over 35 years of age. This is not to mention a substantial number are retired career military personnel. I believe the Chairman of the House Veterans' Affairs Committee, the Honorable Ray Roberts, summed up this question most eloquently when he stated, "The GI Bill is a veterans' measure designed to help veterans. It is not a bill intended to subsidize educational institutions. The GI Bill is not a program to help recruit servicemen for the Armed Forces. The GI Bill is not a form of supplemental income for veterans who are not making enough money and, lastly, the GI Bill is not another form of unemployment insurance." A copy of this letter is being furnished `to all Members of your Committee and with best wishes and kind personal regards, I am Sincerely, DONALD H. SCHWAB, Director National Legislative Service Enclosures PAGENO="0544" 3164 Resolution No. 601 VETERANS ADMINISTRATION PROGRAMS WHEREAS, the justification for continuous review and liberal changes up~-dating all programs administered by the Veterans Administration is clearly evident; and WHEREAS, the Veterans Administration has been the sole agency since 1930 dedicated to carrying out veterans programs and benefits approved by Congress; and WHEREAS, the establishing of the Veterans Administration and sub-S sequent enactment of hard fought for rights and benefits represents the Nation's recognition of its debt to veterans; and WHEREAS, notwithstanding, there are continuous assaults on the integrity of veterans programs by so called "welfare planners" which recommend that veterans programs be merged with programs of other agencies, legislative proposals in the Congress or Executive Orders or actions; now, therefore BE IT RESOLVED, by the 77th National Convention of the Veterans of Foreign Wars of the United States, that we seek approval of the following recommendations by changes in legislation as applicable: 1. Authorize presumption of service connection for psychosis and malignancy if manifested within five years following wartime service. 2. Oppose any and all proposals which could be construed as dis~ membering, dismantling or ifl any way diminishing the integrity of the programs of veterans' rights and benefits as administered by the Veterans Administration. 3. Oppose judicial review of veterans benefits excluding contractual obligations. 4. Authorize service connectien for conditions related to radiation exposure in service regardless of time when disease occurs after separation from service. 5. Oppose setoff of dissbility compansation or pension in Railroad retirement benefits, o~ any other federal retirement to which a veteran is entitled. 6. Opp~se the irrevocability clause of Federal Employees' Compensation in'~rder to permit an election of the greater benefit between Federal Employcas' Compenc~ion and VA. 7. The present rating schad~ile uti.~zcd by the Veterans Administration to remain in effect without chan~n and no revision be made unless it is first submitted to Congress subject to public hearings. (Continued) PAGENO="0545" 3165 Continued Resolution No. 601 8. To provide additional funds and personnel for the Veterans Administration to insure adequate staffing at all VA facilities and prompt administration of all VA benefits to all veterans. 9. Allow the additional 9 months extension under P. L. 93~-508 for post-graduate studies or to whatever extent it is necessary for him to meet his educational objective, 10. Permit veterans to temporarily waive or interrupt their train- ing to conserve entitlement. 11. Provide for a cost of living increase for VA benefits. Adopted by the 77th National Convention of the Veterans of Foreign Wars of the United States held in New York, New York, August 13 through 20, 1976. Resolution No. 601 78-226 0 -77 - 35 (Pt.4) PAGENO="0546" 3166 Resolution No. 614 PERMIT POSTGRADUATE STUDIES UNDER PUBLIC L&7 93-508 WEREAS, the additional 9-nunths' extension for completion of educational benefits under Public Law 93-508 is currently restricted to undergraduate work; and ~HEREAS, the V.F.W. opposed this restriction then hearings were held by the Senate and House Veterans' Affairs Ccxiinittees; now, therefore BE IT RESOLVED, by the 77th National Convention of the Veterans of Foreign Wars of the United States, that we seek the introduction and passage of legislation to resxve the current restriction on the 9-nxnths' extension imposed by Public Law 93-508 to allow the additional time for postgraduate studies or to thatever extent necessary to meet educational objectives. Adopted by the 77th National Convention of the Veterans of Foreign Wars of the United States held in N~ York, N~ York, August 13 through 20, 1976. Resolution No. 614 PAGENO="0547" 3167 Resolution No. 618 VETERANS EMPLOYMENT LAWS WHEREAS, the Senate Veterans Affairs Committee Chairman recently reported that the unemployment rate for veterans 24 years of age or under was 60% higher during the first three months of 1976 than for similarly aged non-veterans; and WHEREAS, there are present laws on the books, such as the 1974 Gd. Bill, which requires `Positive Steps' by federal contractors in the hiring of Vietnam able-bodied and disabled veterans; and WHEREAS, as of this date, two years later, the Department of Labor has yet to issue implementing regulations; now, therefore BE IT RESOLVED, by the 77th National Convention of the Veterans of Foreign Wars of the United States, that we advocate the issuance of implementing regulations by the Secretary of the U.S. Department of Labor as a step toward lowering the high rate of unemployment among Vietnam Veterans. Adopted by the 77th National Convention of the Veterans of Foreign Wars of the United States held in New York, New York, August 13 through 20, 1976. Resolution No. 618 PAGENO="0548" 3168 Resolution No. 624 VETERANS PREFERENCE IN FEDERALLY FUNDED PROGRAMS WHEREAS, it has long been consistent with Congressional and Department of Labor policy that veterans of this nation receive special consideration and preference in programs of job placement and training provided by Federal funds; and WHEREAS, PL 346 of 1944, "GI Bill of Rights" and other Federal legislation state that there shall be an effective placement service for all veterans; and WHEREAS, the mandatory listing provisions of PL 92-540 specifically require veterans preference consideration in the filling of job openings created by Federal funds that is binding on all contracts granting funds to private industry; and WHEREAS, PL 92-540, the Veterans Readjustment and Employment Act of 1972, with respect to veterans preference, specifically states in Chapter 41, Section 2013, "...or any other manpower training or related program financed in whole or in part with Federal funds;" and WHEREAS, the Comprehensive Employment and Training Act of 1973 (CETA), (PL 93-203) does not provide veterans preference consideration in contracts providing Federal grants to state and local governments to all veterans; now, therefore BE IT RESOLVED, by the 77th National Convention of the Veterans of Foreign Wars of the United States, that we request the President of the United States to issue an Executive Order to insure the inclusion of veterans preference requirement in all contracts issued to state and local governments under PL 93-203, the Comprehensive Employment and Training Act 1973; and BE IT FURTHER RESOLVED, that, in lieu of such an Executive Order, we sponsor and support legislation to amend FL 93-203 to provide for veterans preference in all job and job training activities financed through Federal funds. Adopted at the 77th National Convention of the Veterans of Foreign Wars of the United States held in New York, New York, August 13 through 20, 1976. Resolution No. 624 PAGENO="0549" 3169 Resolution No. 638 STRENGTHENING VETERANS RIGHTS UNDER CETA WHEREAS, PL 93-203, CETA of 1973, Section 301 (d) by reference to Chapter 41, PL 92-540 and 93-508 provide authority for State Veterans Employment Representatives to monitor and determine the effectiveness of all programs and activities involving the employment and training of veterans; and WhEREAS, current CETA regulations lack a definition of "special consideration" to veterans; and WHEREAS, there is no realistic identification made by Prime Sponsors of Employment and Training needs for all veteran groups as a target population in grant applications; and WHEREAS, there is an inadequacy of types of programs planned in grant applications with respect to veterans' needs; now, therefore BE IT RESOLVED, by the 77th National Convention of the Veterans of Foreign Wars of the United States, that the term "special considerationc~ be revised to "priority" consideration with a description of what action will be taken to obtain priority; and BE IT FURTHER RESOLVED, that the grant application from Prime Sponsors contain specific statements as to the number of veterans (by category) in Prime Sponsors' Area; (a) the source (s) of this information must include the Employment Service and Veterans Organization, (b) a specific presentation of the above numbers of veterans who are expected to be provided services must be identified with periodic reports on progress with explanation of any deviation; and BE IT FURTHER RESOLVED, that there be a requirement of veteran representation on planning councils with the Prime Sponsor seeking recommendations from the State Veterans Employment Representative concerning such appointment of veterans representation; and BE ITFIJRTHER. RESOLVED, that the quarterly progress report from the Prime Sponsor be made available to the SVER's; and BE IT FURTHER RESOLVED, that there be a designated person on each Prime Sponsor' s staff who has an assignment of major responsibility for the veterans' service; and BE IT FURTHER RESOLVED, that this person so designated be required to work with Local Office Veterans Representatives; and (continued) PAGENO="0550" 3170 Resolution No. 638-Page 2-continued BE IT FURTHER RESOLVED, that after the SVER or his designee completes a monitoring evaluation the Regional Office will within 45 days investigate and make determinations of implementation of any recommendations. If the Prime Sponsor continues to fail to perform, his subsequent funding shall be reduced by that percentage of funding designated for veterans. The Prime Sponsor should have 60 days to initiate remedial action which must be approved by the Regional Office and the concerned State Veterans Employment Representative. Adopted by the 77th National Convention of the Veterans of Foreign Wars of the United States held in New York, New York, August 13 through 20, 1976. Resolution No. 638 PAGENO="0551" 3171 Resolution No. 639 EXTENDING RE-EMPLOYMENT RIGHTS OF VETERANS WHEREAS, a fully manned armed forces is important to the national defense of the United States of America; and WHEREAS, it is a stated policy of the United States Government to fill the ranks of the armed forces with persons who voluntarily enlist for military service; and WHEREAS, the encouragement of enlistments from persons employed in the private sector of the economy should be promoted because of those personvs training and technical skills; and WHEREAS, those persons leaving the private employment sector to voluntarily enlist in the armed forces of the United States should be fully protected under the law as to their re-employment rights at the completion of their military service; and WHEREAS, the present law concerning re-employment rights of veterans, as a general rule, provides protection to persons who enlist in the military services for a period of four years, with extensions of that time available under unusual circumstances; and WHEREAS, in the case of technical training, military services have encouraged voluntary enlistments for a period of more than four years; now, therefore BE IT RESOLVED, by the 77th National Convention of the Veterans of Foreign Wars of the United States, that we support legislation amending Chapter 43, Title 38, of the United States Code relating to veterans' re-employment rights, and extending the period of protection for re-employment to a period of six years. Adopted by the 77th National Convention of the Veterans of Foreign Wars of the limited States held in New York, New York, August 13 through 20, 1976. Resolution No. 639 PAGENO="0552" 3172 Resolution No. 640 IMPLEMENTING VETERANS EMPLOYMENT LAWS WHEREAS, it has been the long established policy of the Veterans of Foreign Wars to support and promote a program of maximum employment assistance for veterans; and WHEREAS, Chapters 41 and 42, Title 38, U.S. Code provide for an effective job placement, counseling and training program for veterans; and WHEREAS, administration of these programs is the responsibility of the Veterans Employment Service, U.S. Department of Labor in cooperation with the State Employment Service agencies; and WHEREAS, there is a need to strengthen the delivery of these services through numerous actions so as to reduce the current high unemployment rate of veterans; now, therefore BE IT RESOLVED, by the 77th National Convention of the Veterans of Foreign Wars of the United States, that we seek legislation or administrative changes to accomplish the following actions: 1. That there be adequate funds appropriated by the Congress, earmarked specifically for employment services to veterans, for the use of the Veterans Employment Service, U.S. Department of Labor in carrying out their responsibilities under the law. 2. That budgeted funds for each State Employment Service agency for services to veterans shall be separately identified for use exclusively for service to veterans. In addition, that there shall be included in each State Employment Service agency budget, adequate funds to support the assignment of full-time and part-time local Veterans Employment Representatives as required by law. 3. That the present nine (9) categories of veterans created by law and regulations for employment assistance purposes be reduced to three (3), namely: (a) disabled veterans who are rated at a compensable degree by the Veterans Administration; (b) handicapped veterans not included in (a); and (c) all other veterans and eligible persons. 4. That the position of Director, Veterans Employment Service, U.S. Department of Labor be elevated to an Assistant Secretary of Labor for Veterans Affairs. 5. That true preference for veterans be made a part of all laws and regulations governing CETA training and employment programs and that each CETA planning council shall have veteran representation as full voting members. Adopted by the 77th National Convention of the Veterans of Foreign Wars of the United States held in New York, New York, August 13 through 20, 1976. Resolution No. 640 PAGENO="0553" 3173 Resolution No. 665 ASSISTANT SECRETARY OF LABOR FOR VETERANS EMPLOYMENT WHEREAS, Congress has established a Veterans' Employment Service in the United States Department of Labor to prorrote vocational opportunities for veterans and to rronitor and functionally supervise the many laws related to veterans' employ- ment and training; and WHEREAS, Congress has required that the Secretary of Labor shall assign to each $tate a Representative of the Veterans' Ekplovment Service and additional repre- sentatives when justified by the veteran population of the state to carry out the purposes of the Veterans' Employment Service in the several states; and WHEREAS, The Department of Labor has assigned a Regional Veterans' Employment Representative to each of its ten Regional Offices to direct veterans' employ- ment affairs in the Region, being responsive both to the Director of the Veterans' Employment Service and the Assistant Regional Director for Manpower; and WHEREAS, because of the complexity of veterans' employment a~d training laws and programs, including numerous reference to veterans in the various titles of the Comprehensive Employment and Training Act, and because of the involved channels of organization through which he must operate, it is difficult for the Director of the Veterans' Employment Service to maintain the necessary direction and control of these significant programs; and WHEREAS, legislation has been introduced in Congress to provide for a separate agency within the Department of Labor to be known as the Veterans' Employment Service, to authorize the appointment of an Assistant Secretary of Labor for Veterans' Employment, and for other purposes; now, therefore BE IT RESOLVED, by the 77th National Convention of the Veterans of Foreign Wars of the United States, that we support legislation now in Congress to authorize an Assistant Secretary of Labor for Veterans' Employment and to establish the Veterans' Employment Service as a separate agency within the United States Department of Labor. Priopted by the 77th National Convention of the Veterans of Foreign Wars of the United States held in New York, New York, August 13 through 20, 1976. Resolution No. 665 PAGENO="0554" 3174 Resolution No. 670 INCREASE VETERANS PARTICIPATION IN CETA WHEREAS, Pennsylvania received almost.$200(l99.Z)million in CETA funds for Fiscal Year 1976; and WHEREAS, the U. S. Department of Labor issued regulations granting disabled and certain other veterans special consideration for participating in CETA Prime Sponsors' programs and public service employment opportunities; and WHEREAS, through the first six months of Fiscal Year 1976, less than 1% of the total CETA participants are disabled veterans, and only 2.4% of the total CETA participants are recently separated veterans; and WHEREAS, veterans comprise nearly one-half of the male work force and male unemployment with disabled and recently separated veterans suffering a much higher incidence of unemployment than their non-veteran counterparts now, therefore BE IT RESOLVED, by the 77th National Convention of the Veterans of Foreign Wars of the United States, that we petition the U. S. Department of Labor to initiate new regulations requiring Prime Sponsors to include a minimum of 35% of all par- ticipants in CETA Titles I, II, and VI to be veterans, with special consideration given to disabled and recently separated veterans. Adopted by the 77th National Convention of the Veterans of Foreign Wars of the United States held in New York, New York, August 13 through 20, 1976. Resolution No. 670 PAGENO="0555" 3175 Resolution No. 680 VETERANS PREFERENCE UNDER CETA WHEREAS, the Comprehensive Employment and Training Act (CETA), passed by the Congress in 1973, does not contain explicit language for Veterans' Preference as a requirement in training and job selections; and WHEREAS, it was clearly understood that such preference would be incorporated in the Federal Regulations when they were issued; and WHEREAS, such Regulations only call for `Special Consideration' for such veterans without specifically defining the meaning of "Special Consideration;' and WHEREAS, the Prime Sponsors who operate these employment and training programs are often averse to giving veterans preference in all training and job opportuni- ties; and WHEREAS, stronger language is needed in order to overcome this Prime Sponsor timidity in serving veterans; now, therefore BE IT RESOLVED, by the 77th National Convention of the Veterans of Foreign Wars of the United States, that the Law and/or Federal Regulations be amended to insure true Veterans' Preference in all training and job opportunities funded under CETA. Adopted by the 77th National Convention of the Veterans of Foreign Wars of the United States held in New York, New York, August 13 through 20, 1976. Resolution No. 680 PAGENO="0556" 3176 Resolution No. 687 ASSURE VETERANS PREFERENCE UNDER CETA WHEREAS, the Comprehensive Employment and Training Act (CETA) of 1973 is the principal federal legislation authorizing manpower training and employment programs or the unemployed and underemployed; and WHEREAS, the unemployment rate for young veterans remains at an alarmingly high level; and WHEREAS, local "prime sponsors charged with the Administration of CETA manpower program and selection of candidates for these programs served proportionately fewer veterans than other significant population segments during Fiscal Year 1976; now, therefore BE IT RESOLVED, by the 77th National Convention of the Veterans of Foreign Wars of the United States, that we advocate a strengthening of CETA legislation, to guarantee preferential service to unemployed and underemployed disabled veterans and veterans of the Vietmam era. Adopted by the 77th National Convention of the Veterans of Foreign Wars of the United States held in New York, New York, August 13 through 20, 1976. Resolution No. 687 PAGENO="0557" 3177 Resolution No. 691 TRAINING AND EMPLOYMENT FOR VETERANS WHEREAS, it has long been the established policy of the Veterans of Foreign Wars to promote a maximum employment program for all Veterans, particularly Disabled Veterans; and WHEREAS, under Public Law 92-540 and Public Law 93-508 the Congress declares as its intent and purpose that there shall be an effective (1) job and job training counseling service program, (2) employment placement service program, and (3) job training placement service program for eligible Veterans, other eligible persons and that, to this end policies shall be promulgated and administered through a Veterans Employment Service within the Department of Labor; and WHEREAS, under the Comprehensive Employment and Training Act (CETA) of 1973, Public Law 93-203 required not only that Veterans be given special consideration in filling public service jobs, but that special emphasis be placed on the develop- ment of jobs which will utilize the special skills these Veterans acquired in the service and that the various Veterans Organizations seek positions on the Planning Councils within their areas to insure that Veterans are given this special consideration for job openings; and WHEREAS, referral priority for Veterans to Training Programs by the State Employment Service Agencies has long been a legal r.~andated policy established by the Secretary of Labor and by Congress in the Veterans Employment Readjustment Act of 1972; and WHEREAS, the continued implementation of Executive Order No. 11701 which requires Federal Contractors and subcontractors to give "special emphasis" to the employment of Disabled Vietnam Era Veterans, other Veterans and other eligible persons in listing of Mandatory Job Orders with the Public Employment Service; now, therefore BE IT RESOLVED, by the 77th National Convention of the Veterans of Foreign Wars of the United States, that the implementation of Public Law 92-540 and Public Law 93-508, requiring Job Counseling, Training, and Placement service for veterans, and other eligible persons, and Public Law 93-203, Comprehensive Employment and Training Act, requiring Veterans be given special consideration in filling public service jobs, etc., and Executive Order No. 11701, requiring Federal and sub- contractors list their job openings with the Public Employment Service and give special consideration to the hiring of Vietnam Era Disabled Veterans and other eligible persons and continued adequate appropriations by the National Congress for financing the Employment and Training Service, including the State Employment Security Agencies, the United States Employment Service and the Veterans Service. Adopted by the 77th National Convention of the Veterans of Foreign Oars of the United States held in New York, New York, August 13 through 20, 1976. Resolution No. 691 PAGENO="0558" 3178 Resolution No. 695 VETERANS EDUCATIONAL ASSISTANCE WHEREAS, the Veterans of Foreign Wars of the United States was instrumental in shaping the current GI bill as well as its predecessors and supporting passage thereof in the Congress of the United States; and WHEREAS, the current GI bill extended entitlement to post-Korean Conflict veterans as well as Vietnam-era veterans; and WHEREAS, the V.F.W. strongly supported extending the time for completion of education thereunder from eight to ten years; and WHEREAS, the V.F.W. supported the extension of benefits from 36 to 45 months~ and WHEREAS, the V.F.W. fought for realistic increases in educational assistance allowances; and WHEREAS, when President Ford vetoed the most recent increase in payments for educational assistance the V.F.W. led the fight in Congress which resulted in the overriding of the presidential veto; and WHEREAS, the V.F.W. has strongly opposed repeated attempts by the Administra- tion to reduce the delimiting period from ten years to eight years; and WHEREAS, under the current CI bill veterans may complete not only secondary education in high schools but even complete grade school while receiving monetary assistance from the Veterans Administration and still receive full educational assistance for undergraduate studies; and WHEREAS, all things considered, we believe the current CI bill more generous than its predecessor; and WHEREAS, educational assistance is a readjustment benefit; and WHEREAS, funding in the amount of $662 million to $716 million necessary to extend the ten year time limit by even one year is not included in the First Concurrent Budget Resolution for the Fiscal Year 1977; now, therefore, BE IT RESOLVED, the 77th National Convention of the Veterans of Foreign Wars of the United States opposes any further extension of the time limit for the com- pletion of education under the provisions of Chapter 34, Title 38 of the United States Code. Adopted by the 77th National Convention of the Veterans of Foreign Wars of the United States held in New York, New York, August 13 through 20, 1976. Resolution No. 695 PAGENO="0559" 3179 Resolution No. 695 VETERANS EDUCATIONAL ASSISTANCE WHEREAS, the Veterans of Foreign Wars of the United States was instrumental in shaping the current CI bill as well as its predecessors and supporting passage thereof in the Congress of the United States; and WHEREAS, the current GI bill extended entitlement to post-Korean Conflict veterans as well as Vietnam-era veterans; and WHEREAS, the V.F.W. strongly supported extending the time for completion of education thereunder from eight to ten years; and WHEREAS, the V.F.W. supported the extension of benefits from 36 to 45 months; and WHEREAS, the V.F.W. fought for realistic increases in educational assistance allowances; and WHEREAS, when President Ford vetoed the most recent increase in payments for educational assistance the V.F.W. led the fight in Congress which resulted in the overriding of the presidential veto; and WHEREAS, the V.F.W. has strongly opposed repeated attempts by the Administra- tion to reduce the delimiting period from ten years to eight years; and WHEREAS, under the current GI bill veterans may complete not only secondary education in high schools but even complete grade school while receiving monetary assistance from the Veterans Administration and still receive full educational assistance for undergraduate studies; and WHEREAS, all things considered, we believe the current CI bill more generous than its predecessor; and WHEREAS, educational assistance is a readjustment benefit; and WHEREAS, funding in the amount of $662 million to $716 million necessary to extend the ten year time limit by even one year is not included in the First Concurrent Budget Resolution for the Fiscal Year 1977; now, therefore, BE IT RESOLVED, the 77th National Convention of the Veterans of Foreign Wars of the United States opposes any further extension of the time limit for the com- pletion of education under the provisions of Chapter 34, Title 38 of the United States Code. Adopted by the 77th National Convention of the Veterans of Foreign Wars of the United States held in New York, New York, August 13 through 20, 1976. Resolution No. 695 PAGENO="0560" 3180 Resolution No. 697 PROPOSED PEACETIHE SI BILL WHEREAS, a number of bills have been introduced in Congress to establish a peacetime GI Bill to benefit members of the all volunteer military establishment; and WHEREAS, most of these bills call for a contribution by the Arned Forces member to be matched by the Veterans Administration at the rate of $2 for every Sl contrib- uted by the member; and WHEREAS, we do not believe the Veterans Administration budget should be used as a recruiting tool by the Department of Defense to the detriment of veterans benefits and services; now, therefore BE IT RESOLVED by the 77th National Convention of the Veterans of Foreign Wars of the U.S. that we oppose any peacetime GI Bill funded in whole or in part by the Veterans Administration, but we wholeheartedly support such new GI Bill if funded in its entirety by the Department of Defense and active duty members of the Armed Forces of the United States, and administered by the Veterans Adminis- tration.:. Adopted by the 77th National Convention of the Veterans of Foreign Wars of the United States held in New York, New York, August 13 through 20, 1976. Resolution No. 697 PAGENO="0561" TESTIMONY by the NATIONAL ASSOCIATION OF CONCERNED VETERANS PRESENTED to the EXECUTIVE COREETTEE of the COMHETTEE on VETERANS' AFRAIRS of the UNITED STATES SENATE by TIMOTHY L. CRAIG SEPTEMBER 1, 1976 Prepared by: Jeifries Carey President "NACV Is a tax exempt non profit corporation" 19s30 L STREET, NW., SUITE 314 * WASHINGTON, D.C. 20036 * 202/ 785'21~5 3181 flatonal assocoton of Cona~i ~et~a~ 78-226 0 - 77 - 36 (Pt.4) PAGENO="0562" 3182 flational assocotion of Concerned `veterans IT~ Mr. Chairman, Distinguished Members of the Committee: On behalf of myself, the Board of Directors and the entire membership of the National Association of Concerned Veterans (MACV)3 I would like to extend my appreciation for this opportunity to submit our comments on 5-969 as amended, the `Veterans Education and Employment Assistance Act". I would also like to extend our commendation to the members and staff of this Committee for the fine work you have dome on behalf of veterans in general, and the Vietnam Veterans in particular, over the past years. The commitment and dedication exhibited by members of this Committee, as well as by the staff, are encouragement and a hope for veterans in general, and Vietnam Veterans specifically. The National Association of Concerned Veterans is the only major national veterans' organization composed prinarily of Vietnam era Veterans in existence today. Although MACV is open to any "war veteran", we are nevertheless composed of 90 percent Vietnam era Veterans. Although we may not be THE voice of the Vietnam era Veteran, we believe that we are at lease one of the stronger voices of the Vietnam era Veteran in exist- ence today, Mr. Chairman, again, we thank you and this fine committee for the time, efforts and dedication devoted to the amendments to Senate Bill 969, which we are discussing today. As you know, it has long been the position of NACV to continue the G. I. Bill, however, since the House of Representa- tives has passed legislation for termination, we have advocated the 1900 L STREET NW. * WASHINGTON D.C. 20036 * 202 / 785-2155 PAGENO="0563" 3183 -2- continuation until a suitable substitute could be analyzed and presented. Today, we speak to that s'fost5~tute, the "Veterans Education and Employ- mont Assistance Act - 3.969", Amendment Number 2005. It is our opinion that the distinguished chairman of this Cormuittee and &rnator Stafford, produced a. very fine piece of legislation in the `Veterans Education and Employment Assistance Act", because it gives us a reasonable alternative to the present G. I. Bill. The present 0. I. Bill, particularly with its educational provisions, has had the greatest possible impact on American Society. For every dollar invested in the G. I. Bill, the American economy has reaped a return of fron 300 to 600 percent in income. It must definitely be stressed that the G. I. Bill is an investment, not a "give-a-way" program. Also, this does not even address the cultural and socialogical impact of the 0. I. Bill, which can never by accurately neasured. The educational assistance program has prodeced many busine as people, attorneys, doctors, civic leaders---and even some Congressional Persons. The G. I. Bill has done much for this nation. To further emphasize the importance of the G. I. Bill, whether it be the law as it is in effect today or the proposed legislation we are currently areaking to, I refer to Senator Staff art's remarks when he stat~ that "my involve- ment with the concept of the all volunteer force goes back to its beginnings. It is something that I was deeply coruitted to achieving and am proud that it has been achieved. But achieving that goal, and sustaining it are nece ssarily entwined. I fully believe that the continuation of some program of educational benefits efter service is a necessary recruitment tool and this is part of what we are trying to achieve with this amendment." He further stated "Nuc~ has been said about the higher pay scales and bonuses being sufficient in~ntives for thc' recruit now considering entry into the armed services~ I question the PAGENO="0564" 3184 wisdom of termination of all opportunities for advaiwed eduoaU ~ after service in light of the contri~Dutiofl former G. I. Bill programs have made to our country and its veterans." Therefore, a~G. I. Bill is definitely vital to our country's defense. We have testified on numerous occasions before this c~nittee, and have spoken to some of the provisions of this legislation, therefore, we will only speak to those provisions about which we have rern~vations. Title I, Sec. 102.: Historically, the membership of HACV has unanimously ~nted in favor of resolutions which mandate an abolition of the delimitdeg date. Our position has always been that if a veteran spends two,, three or twenty years of his or her life in service to his or her couxtry, then he or she should be allowed to utilize his or her earned cdicational benefits regardless of when he or she is able to begin. Further, while we applaud this provision allowing the extension of educational henefits beyond ten years for disabled veterans, we have certain reservatEons about the manner in which this extension is provided. We would rather see such an extension codified in the law rather than left to the discretiou of the Administrator of Veterans affairs. Title II, Sec. 2OI~.: Sane remarks as stated in Title I, Sec * 102, above, exept as it pertains to any eligible veterans. Title II, Sec. 206.: It is the general consensus of PACT that subsection (~t1~i of this provision be deleted. Irrespective of the institution, if this provision is enacted, the record keeping that would be required to account for those students receiving federal aid in full or in part wou~]d tremendously impair control, eni'orcement, monitoring and accuracy in: the entire PAGENO="0565" 3185 .44- administrative system. Lower income students as well as veteranr would be considered not eligible due to the overalL coverage of this provision, This provision would also increase the financial burden of the institution in the record keeping area. We would hope that the committee would reconsider this provision and the magnitude of its impact upon the educational community. Mr. Chairman, while we have no major objections to the other provisions of this proposed legislation, we do hope that the Coiithttee will give daè eonsideration to the following: I. The nine months of additional benefits - in removing the current restriction to undergradate use, we would hone that those veterans that lost eligibility on May 31, 1976, and were financially not able to continue their programs, will be allowed the opportunity to continue. 2. The VA educational loan - requirements be liberalized so that an eligible veteran may qualify without the red tape that he must currently cut througI~ such as being turned down by 3 banks. 3. The reporting fee - be adjusted to more ac.curately reflect the cost of administrative services and to be consistent with fees provided in other student aid programs. In closing, Mr. Chairman and Members of the Committee, I again thank you for your dedication, commitment, and fine work on behalf of veterans and we are grateful for this opportunity to present our ccsruents to you. We can only stress that the Vietnam Era is not yet over, but that this society may very well feel the effects of that "Era" for years to cone. As a product of that Era, we do not feel we are an "unreasonable burden to society", but rather, we only desire the chance an~ opportunity to PAGENO="0566" 3186 niake our greatest contribution to society, and to the Nation for which we fought. We stand ready to work and cooperate with this coirunittee in any possible way and wifl answer any questions you may have for us to the best of our ability. Thank you. PAGENO="0567" 3187 ~ I4IW1EvJI~ _ AMERICAN VETERANS OF IDOLS JAR II*000EA-VIET RAM ___________ AMVETS National Headquarters 1710 Rhode Island Avenue, NW., Washington, D.C. 20036 (202) 223-9550 100EOT A SNIFFER N a tional lactic, & ~ Director September 3, 1976 The Honorable Vance Hartke Chairman, Veterans' Affairs Conanittee 313 Russell Senate Office Building Washington, D.C. 20510 Dear Mr. Chairman: This lette~ Is to serve as a further update of AMVET views on Amendment 2005, S.969. As per the mandate of our 32nd National Convention held recently in Philadelphia, AMVETS is in fullconcurrence with Chapter 32 - the Post Viet Nam Era Veterans' Readjustment Assistance Act. This new in- novative direction brings about a well-defined distinction between wartime and peacetime benefits. The fact that the peacetime serviceman must contribute towards his future education further adds to that distinction. Thus ANVETS favors this alternative to discontinuing the 6.1. Bill as we have previously known it. Since AMVETS has historically supported education and training \for wartime veterans as sacred, we strongly support Section 3 of Title IV which provides that in the event universal military training is reimposed by law that those entering military ser- vice after the effective date of such a change shall be eligible for Chapter 34 educational benefits. Thus, AMVETS is now on record as supporting this "mini" G.I. Bill designed to assist the ~eacetime military person. If AMVETS can be of further assistance, please do not hesitate to contact us. Very truly yours, 0 ERT A. SNIFFE National Service and Legislative Director RAS:dai PAGENO="0568" 3188 UNIVERSITY OF LOUISVILLE VETERAN'S CLUB ROOM 37 STUDENT CENTER dO DEAN OF STUDENTS UNIVERSITY OF LOUISVILLE VE~-~ ~ LOUISVILLE, K~NTUCKY i~O2O8 Senator Vance Hartke L:) United States Senate ~ 3Ep 0 ~ 1Q7 Washington, D.C. 20~l0 I JJY Dear Senator Hartkez The University of Louisville Veterans' Club would like to bring to your attention the enclosed petition concerning S.969 and ammendment 2OO~, Veterans' Education and Employment Assistance Act of 1976, which you presented to the Senateon July 2,1976. We find fault with three portions of the amnendment but feel that overall it is a good piece of legislation. We would wish a greater than 8~ increase but realize the inflationary impact of this and will not push for a larger increase. We are, however, strongly opposed to the fact that the 10 year delimiting date was not extended,and,to provision nine of Title II which "extends to all programs of education the requirement that no more than 8~ percent of the students enrolled incertain approved courses be in receipt of V.A. benefits or other Federal grants". The delimiting date is unjust. A veteran should be allowed to use his or her educational benefits at any time in the veteran' a lifetime that he or she wishes. The manifold return from this investment in the future of our country far outweighs the possible misuse of the funds and a more strict police policy by the V.A.. could eliminate most of the misuse. Legislation is presently in effect which limits the percentage of students using V.A. benefits in certain approved courses. We can see no reason for combining other Federal Aid to education programs with the V.A. program. These programs are financed independently, regulated independently, and should be independent of each other. Please take these points and the 2,327 signatures we have on our petition to date into account when you seek passage of this bill. Thank you very much for your kind attention to this matter. Sincerely, ,i~ ~i1~4~J Wynn~'~2~xander Chairperson Executive Cc~unitee University of Louisville Veterans' Club PAGENO="0569" 3189 UNWERSITY OF KENTUCKY Hopktnsville Community College PREP Bldg. 2131, 12th and Indiana Fort Campbell, Kentucky 42223 ~~7'E~F?.aThi~, 1q~;J~½~1 ~ September 8, 1976 S~p 1 ~ 1Q~. I!!: Senator Vance Hartke , , Senate Office Building Washington, D.C. 20510 Dear Senator Hartke: Having read and discussed with colleagues the proposed amendment for Post-Vietnam Era veterans, I wouTd say that the match system will probably work fine for our college level students. PREP, on the other hand, differs significantly in its operation and probably will suffer tremendously from the amendment. As you know, PREP has not become the program Congress originally in- tended. It is not a voluntary program; the Army requires the troops to come for review for college, completion of high school work, and review for mili- tary tests. In fact, at Fort Campbell PREP is a hodge-podge of programs with little else operating for remedial studies. The troops are often required to attend numerous cycles of PREP instruc- tion even after it is determined that they likely will never be able to per- form at a level where a high school equivalency certificate can be attained. For these troops, the Carnegie unit PREP program is available where a man earns a credit per term and credits for various military activities which produces a high school diploma, more valued by the Army but representing a lesser accomplishment. These repeated terms of PREP can hurriedly eat away the serviceman's benefit package. Since the Army will be unable to require men to contribute to the bene- fit program, PREP will most likely die. The young troops who drop out of high school to join the Army are not going to take money out of their pay- checks to go to school. I understand that Department of Army has funds to conduct the remedial program (PREP). Since the military has usurped much of the authority by channeling program budgets through its offices for approval prior to V.A. review, it seems appropriate that Defense funds should pay for the instruc- tion. I do not look forward to losing the autonomy PREP programs now have when we can refuse unsound educational practices requested by the military because we are not employed by them and have V.A. regulations to prohibit some practices. AN EQUAL OPPORTUNITY INSTITUTION PAGENO="0570" 3190 Although my institution may not be selected as one of the Army's contract PREP institutions and although continual Army change, fluctuations in enroll- ments, and austere low bid budgets may produce a program which my institution will not want to be a part, military funding, in my opinion, is the only way PREP can meet the Army's needs and the troops' needs in a manner similar to its present operation. Margaret D. Smith, Coordinator Fort Campbell Programs MDS:jrm PAGENO="0571" 3191 ¶~T~A~t~'ENPOIIT COLLEGE OF BUSINESS 415 E49T FULTON GRAND RAPIDS MICHIGAN 49502 September 8, 1976 The Honorable Mr. Hartke United States Senate 313 Russell Senate Office Building Washington, D. C. 20510 Dear Senator Hartke: As President of Davenport College of Business, I feel it my duty and responsibility to respond to The Hartke Amendment" No. 2005 to S.969. I see many inconsistencies in the mood and strategies of the different governmental departments and agencies. In a series of regional workshops held during the first quarter of 1973, the Office of Education requested the help of colleges and uni- versities to interest and motivate veterans to take advantage of their G.I. Bill of Rights and return to continue their education. "Congress does not make laws to be ignored" was the them'~ of these regional work- shops. The participation rate in the Vietnam Era G.I. Bill in 1972 was an unbelievable 24 percent. This figure shows that on the other end of the scale 76 percent of the eligible veterans were not using their G.I. Bill benefits. This situation is one in which the Office of Education, the American Association of Community and Junior Colleges, and the American Legion proposed to take action as outlined in the publication of Vantage Point. With grants from the Office of Education, a 10 step Outreach Program was designed to increase the veterans' interest in their educational future. There is one point that really made these Outreach efforts work. The veterans who were separated between January 31, 1955 and May 31, 1966 were not eligible for G.I. Bill benefits at the time of their separation from active service. It was not until the inception of the Vietnam Era 0.1. Bill of 1966 that they were entitled to any educational benefits. The eligibility of the "back-log" (Post- Korea, Pre-Vietnam) veteran was never extensively publicized with the end result being millions of veterans who were eligible for G.I. Bill benefits but did not know of their eligibility. The Outreach efforts revealed that veterans were more than happy to utilize the educational opportunities available once they learned of their eligibility. The three years of the Outreach effort has produced a rise in the parti- cipation rate to. in April 1976, 59 percent. Was the Outreach effort a success? I think so. The "Hartke Amendment No. 2005 to S.969 or the Veterans Education and Employment Assistance Act of 1976 is endangering the success of PAGENO="0572" 3192 the Outreach effort. Certain provisions contained in the "Hartke Amendment' would handcuff public and private colleges and universities in their organization and administration of Veterans Educational Programs. My specific objections are: 1) the 85-15 percent ratio restrictions (Sec. 206), 2) the restriction on locations of branch schools (Sec. 509), 3) the time periods in which students must finish programs (Sec. 207 and Sec. 307), and 4) the restrictions on the attorney-in-fact check assignments. (Sec. 701). First, the 85-15 percent ratio (Sec. 206) limitations in "certain" approved courses of students receiving V.A. benefits or other Federal grants runs contradictory to the goals that were first promulgated by the Office of Education in the 10 step Outreach Program seminar on "Congress does not make laws to be ignored." Thy theme of that meeting was to involve colleges and universities in the educational futures of millions of veterans. The Office of Education encouraged the initiation of "special needs" programs to permit the entry of veterans who were unable to attend the traditional full time day school. The abolishment of such programs will leave a gaping hole in modern educ~tion. The rising cost of education almost demands the student to seek some form of financial aid. To place a restriction of the percentage of students receiving benefits is discriminatory. Second (Sec. 509), the regulations on the locations of branch campuses and extensions are discriminatory against private educational institutions. Private educational institutions would be prohibited from expanding their educational services and facilities outside their geographic boundaries. If there is a need for higher education in an area outside the "normal community" distance from the institution this section of the proposed law would make it impossible to serve that community or area by a private school. Tax supported institutions would be exempt outside of their taxing area. Education should not be so tightly bound that it could not serve the community. Third (Sec. 207 and 307), the restriction and regulations of the timr. periods to finish a prescribed course of instruction are most unacceptable to the average adult student. The bachelor's degree is universally thought of sac four year degree. Sections 207 and 307 would require that a veteran student must maintain 15 hours of credit per semester and no less to qualify his enrollment as progressing satis- factorily. If a student is attempting a degree on a part-time basis under no circumstances would his progress be considered satisfactory. These sections of the "Harake Amendment' would eliminate the trend of continuing education among veterans. Fourth and finally, (Sec. 701) the regulation that prohibits check assignment to an attorney-in-fact for the purpose of receiving and executing a power of attorney is a violaticn of the privacy of the veteran student. The attorney-in-fact and power of attorney assignment is made available for the convenience of the veteran student. This type of service can be an aid in reducing overpayments by the Veterans Administration. If the school or training establishment holds the power of attorney and the attorney-in-fact assignments to receive and negotiate the education assistance checks it could serve as one more check on whether or not the studei~t is actually in school and whether he or she PAGENO="0573" 3193 is entitled to the Veterans Administration payment. This service could be an aid in the administration of V.A. educational benefits and should not be eliminated. The remainder of the "Hartke Amendment contains desirable elements needed to upgrade the current G.I. Bill of Rights but it seems that the present Ford Administration and the Veterans Administration is bent on making it increasingly difficult for veterans to utilize their entitle-. ment. Is the G.I. Bill too successful for the budgetary limitations of the V.A. and the Ford Administration? If so, then please say so! Don't tic the hands of the colleges and universities of America in their efforts to serve the veterans. Thank you very much for your time and consideration of my views. Respectfully, President Davenport College of Business PAGENO="0574" 3194 i ~ ~ee~n MaiIgram~ F1~!: -~ 2-0'48006E258 09/XA/76 ICS IPMBNGZ CSP WSHB 816765A900 MGM TDBN KANSAS CITY MO A68 09~1A 0~432P 051 SENATOR VANCE HARTKE ROOM Aj~ RUSSELL OFFICE BLDG r WASHINGTON DC 20510 i W7o YOUR INVALUABLE ASSISTANCE TO VETERANS OVER THE YEARS IS CLEARLY A MATTER OF RECORD, THROUGH YOUR INITIATIVE, COUNTLESS VETERANS HAVE REALiZED THEIR EDUCATIONAL AND VOCATIONAL GOALS. I HAVE ANXIOUSLY AWAITED YOUR COMPREHENSIVE SENATE BILL 969, AND WISH NOW TO RELAY TO YOU MY SENTIMENTS ON VARIOUS PROVISIONS THEREIN. SENATE BILL 969 AS AMENDED CONTAINS VARIOUS PROVISIONS W~IICH WOULD PROVIDE MUCH NEEDED ASSiSTANCE AND SUPPORT FOR STUDENT VETERANS AND FOR OUR NATIONS EDUCATIONAL COMMUNITY. THESE INCLUDE THE COST OF LIVING INCREASES AND THE DELETION OF THE UNDERGRADUATE RESTRICTION ON THE 9 MONTH ENTITLEMENT EXTENSION. HOWEVER, THE SECTION CITED BELOW WOULD, IF ENACTED, SE DETRIMENTAL TO A VAST MAJORITY OF THE STUDENT VETERANS AND THE EDUCATIONAL COMMUNITY. THEREFORE, I URGE YOU TO SUPPORT THE FOLLOWING ACTIONS, DELETE SECTION 206. THIS SECTION DOES NOT PERTAIN TO ACADEMIC JUSTIFICATIONS FOR COLLEGES AND UNIVERSITIES. TO IMPOSE SUCH QUOTAS IS UNREALISTIC. THE RELATIVE PERCENTAGE OF ENROLLMENT OF FEDERALLY AIDED STUDENTS `4AS NO RELATIONSHIP TO COURSE QUALITY. DELETE SECTIONS 207 AND 307. DETERMINING THE VALIDITY OF ANY TEMPORARY INTERRUPTION OF PROGRAM PURSUIT MUST REMAIN WITH THE VETERAN, NOT WITH THE VA, DELETE SECTION 208, THIS SECTION ALARMINGLY OVERLOOKS THE PURPOSE OF INDEPENDENT STUDY, WHICH IS TO PROVIDE THE OPPORTUNITY TO PURSUE AN EDUCATIONAL PROGRAM MORE IN DEPTH THAN A CLASSROOM ALLOWS. DELETE SECTION 507. THIS SECTION WOULD RESULT IN MULTIPLE INTERPRETATIONS AND UNREASONABLE REQUIREMENTS THAT RESULTED IN MANY CASES WHEN THESE PROVISIONS WERE EMBODIED IN THE RULES AND REGULATIONS GOVERNING THE G I BILL. INCREASE SECTION 508. PROPOSED INCREASE HEREIN IS WELL FOUNDED, BUT IT FALLS FAR SHORT OF NEEDED MONIES FOR THE DEFRAYING OF AN INSTITUTIONS ADMINISTRATIVE COST FOR VA REQUIREMENTS OF REPORTING AND RECORD KEEPING. DELETE SECTION 509. THIS SECTION WOULD ONLY SERVE TO RESTRICT EDUCATIONAL OPPORTUNITIES FOR VETERANS IN THEIR COMMUNITY. INCREASE SECTION 503. ADEQUATE AND REASONABLE FUNDING FOR STATE APPROVING AGENCIES SHOULD RESULT IN A VASTLY IMPROVED MONITORING OF VETERANS APPROVED EDUCATIONAL OPPORTUNITIES. INDEED, THE STATE APPROVING AGENCY EXISTS FOR THIS PURPOSE, YET THEY REMAIN WILFULLY UNDERFUNDED AND UNDERSTAFFED. THE EDUCATIONAL INTEGRITY OF THE G I BILL MUST BE MAINTAINED AND ABUSE MUST BE AVOIDED. IN ORDER TO ACCOMPLISH THESE ENDS, RESPONSIBLE AND COMPREHENSIVE STEPS ARE NEEDED. IF THE PROVISIENS CITED ABOVE FOR DELETION WERE PROPOSED TO INSURE EDUCATIONAL INTEGRITY AND PREVENT ABUSE, IT IS IMPORTANT TO NOTE THAT THEY WOULD IN PAGENO="0575" 3195 FACT DO NEIT~.4ER, THEY WOULD, HOWEVER, SERVE TO PARTIALLY RESTRICT MANY WORTHWHILE EDUCATIONAL OPPORTUNITIES FOR VETERANS, I DEEPLY APPRECIATE YOUR ATTENTION TO THE PROVISIONS OF 5, 969 CITED ABOVE, AND URGE YOUR ACTION IN THIS. IF I CAN PROVIDE ANY ADDITIONAL INFORMATION OR ASSISTANCE TO YOU ON THIS MATTER, PLEASE DO NOT HESITATE TO NOTIFY ME, RESPECTFULLY, JAMES I DEAL DIRECTOR VETERANS AFFAIRS NATIONAL COLLEGE OP BUSINESS BOX 1780 RAPID CITY SD 57701 16150 EST MGMCOMP MOM PAGENO="0576" 3196 ~homn~ ~eIson ~omrnunity ~o11ege P. 0. Box 9407 * Hampton Virginia 23670 Phone (804) 826-4800 ~:~2r q75 September 15, 1976 The Honorable Vance Hartke Chairman, Committee on Veterans Affairs United States Senate Washington, D. C. 20510 Dear Senator Hartke: I am writing to convey comments on Amendment 2005, which you and Senator Stafford have proposed to 5. 969, relating to the C. I. Bill. The* following comments are made on behalf of the faculty, staff and students of Thomas Nelson Community College (TNCC). We would prefer that the G. I. Bill be continued as it is. For the 1975-76 academic year, the veteran enrollment at TNCC was 2, 100, which was 46% of our total enrollment. For the same year, the college's PREP enrollment was 466, which was 10% of the total enrollment. Therefore, it becomes very clear why we would like to indicate support for some of the features of the bill, as well as register some serious concerns about certain changes that it would.bring about in the present law. For example, Chapter 32 creates a new veterans education program which places a considerable greater financial responsibility upon the serviceman and provides smaller benefits. The serviceman contributes one -third of the funds; the maximum after separation is $225 a month for up to 36 months, compared to $270 for a single person for 36 months under the present law, and $292 for 45 months under S. 969. There is no additional allowance for a spouse or children, as in th~ present law. We suggest that the serviceman's contribution be matched three to one rather than two to one while in service, which would maintain benefits at approximately the present level. In addition, we would strongly urge that Office rf fhe Pcesidnct PAGENO="0577" 3197 the Secretary of Defense approve a Defense Department contribution to the plan, as the bill authorizes him to do, in order to make the benefits more attractive. We applaud the provision which would extend benefits from 36 to 45 months and raise benefit levels, We also strongly support the continuation of PREP which has helped hundreds of servicemen and women from dis- advantaged backgrounds in the Tidewater Virginia area and some 350, 000 nationwide. The PREP program is an enormously useful program which would be ended by the House-passed Veterans Bill. Another desirable feature is the increase in the amounts available from the loan program, We also have strong objections for the bill's extension of the 85-15 rule, which would impose burdensome record-keeping requirements on the college's already over-burdened staff, In addition, it would extend the oversight of the Veterans Committees of Congress and the Veterans Administration to programs within the jurisdiction of the education com- mittees and the U. S. Office of Education, We appreciate the opportunity to convey to you and your committee our objections and support for these provisions and our suggestions for changes. Sinc erely, G, 0. Cannon Pre sident GOC /jmb 78-226 0 -77 - 37 (Pt.4) PAGENO="0578" 3198 ARMY EDUCATION CEPTER Larson Bks., Kitzingen APO New York 09701 AETSWRZ-K-AB Honorable Vance Hartke Chairman of Cossnittee on Veteran's Affair's U.S. Senate Washington, D.C. 20510 Dear Senator Hartke, Se tenber 1976 VETSRAN~ AFF~ r~rpr SEP291c~ .1 I.rP;rrJ~n;i:j VIA-~;~~~ 1~*'J, D.~.. Please add my support to Amendment #2005 to 5. 969 "Veterans Education and ~nployment Assistance Act of 1976," particularly that portion per- taining to the continuance of the PREP program. I recently completed a doctoral dissertation at the University of Southern California entitled "Relationship of a High School Diploma in USDESEA Pre-Discharge Education Program to Army Performance," which clearly showed the value of the high school PREP program. I am enclosing a brochure which includes an extract of the dissertation. Should your Committee desire a copy of the dissertation, I would be happy to provide a Xerox copy. Sincerely ERNEST E. PERSONEUS Education Services Officer PAGENO="0579" 3199 UNIVERSITY OF SOUTHERN CALIFORNIA SCHOOL OF EDUCATION FINAL ORAL EXAMINATION OF ERNEST ELLSWORTH PERSONEUS SYRACUSE UNIVERSITY B.A., 1950;M.A., 1951 FOR THE DEGREE OF DOCTOR OF EDUCATION Friday, June 18, 1976, 9:00 A.M. United States Dependents Schools, European Area Heidelberg, Germany COMMITTEE ON STUDIES Professor Stallings, Chairman Professor Smith Professor Georgiades PAGENO="0580" 3200 OUTLINE OF GRADUATE PROFESSIONAL STUDIES Administration and Supervision Organization and Administration of Public Education Avery Legal Aspects of School Administration Avery Readings in Educational Administration and Supervision Stallings Seminar in School Organization and Administration Avery School District Personnel Administration Murdy School Administration and the Community De Silva Seminar in School Business Administration Stallings Critique of Research in Educational Administration and Supervision Stallings Dissertation Stallings Curriculum and Instruction Curriculum Planning in Secondary Schools Georgiades Seminar in Secondary School Curriculum Georgiades Evaluation of Educational Programs Udinsky Seminar in Curricular Innovations Georgiades Social and Philosophical Foundations Philosophies of Education O'Neill Education in Europe O'Neill Advanced Sociology of Education Brackenbury Educational Psychology Contemporary Psychology in Education Mandell Educational Statistics I Smith Research Methods in Education Smith PAGENO="0581" 3201 DISSERTATION RELATIONSHIP OF A HIGH SCHOOL DIPLOMA IN USDESEA PRE-DISCHARGE EDUCATION PROGRAM TO ARMY PERFORMANCE Purpose. The purpose of this study was to determine the relationship of high school diploma attainment in United States Dependents Schools, European Area (USDESEA) Pre-disch~srge education program (PREP) to performance of soldiers at the end of their first term of Army enlistment. Procedure. Research of the literature was pursued in terms of high school dropouts and their characteristics. The need for dropout self-concept enhancement was noted with work-study programs helpful in this regard. Army-conducted research was shown to be related to the development of dropout self-concept and effectiveness for some categories of soldiers. Army performance criteria were selected from the requirements for reenlistment for a second term of service, specified by Army regulation. These were grade level attained, Military Occupational Specialty Evaluation score, disciplinary infractions, General Technical score of the Army Classification Battery. Additional descriptive variables of race, home region, Armed Forces Qualification Test score, and marital status were selected for comparative purposes. Reenlistment eligibility and actual reenlistment were also used to provide an overall measure of Army performance. Soldiers who attained a USDESEA PREP high school diploma after entry into the Army were compared with three other groups: (1) soldiers who entered the Army as high school graduates and remained high school graduates or had some college; (2) soldiers who were non-high school graduates at entry and then attained GED equivalency; (3) soldiers who were non-high school graduates at entry and were still non-high school graduates at the end of their term of enlistment. Findings. The principal results were: (1) there was a difference in the four groups in grade level attained and GT score of the Army Classification Battery; (2) there was no difference in the four groups in MOS Evaluation score and disciplinary infractions; (3) there was a difference in the four groups in race, home region, and AFQT score; there was no difference in marital status; (4) there was a difference in reenlistment in the four groups. Conclusions. From the findings, the following conclusions were formulated: (1) attainment of grade up to E-4 was not related to high school educational level but attainment of E-5 required high school educational level; (2) the PREP graduate equaled the high school graduate at entry and the GED equivalency attainer in Army performance, although starting from behind in terms of aptitude as shown on the AFQT and the GT score of the ACB; (3) the PREP graduate and the GED equivalency attainer reenlisted for second terms in the Army to a much greater extent than did the high school and non-high school groups; (4) the PREP graduate and GED equivalency attainers develop a favorable attitude toward the Army as a result of a high school diploma or equivalency while in the Army; (5) the AFQT and the CT score of the ACB provided good indications of high school level achievement in the Army. Recommendations. The following recommendations were offered: (1) The Army should continue to recruit the dropout, non-high school graduate on a selective basis. (2) The Army should continue to offer the opportunity for non-high school graduates to attain the high school diploma after enlistment in the Army. (3) The methods and conditions which PREP employs - small class size, individual needs emphasis, credit/no credit grading system, evaluation based on behavioral competencies - should be continued and expanded in Army education programs. (4) The Army should make known the benefits and advantages of the PREP program both to Commanders and Supervisors within the Army and to civilian agencies likely to be concerned. (5) Further research on the PREP program to determine the attitudinal and self-concept values of the program is needed. PAGENO="0582" 3202 ERNEST ELLSWORTH PERSONEUS 1924 Born in Hagaman, New York 1941 Graduated from W.H. Lynch High School, Ams- terdam, New York 1950 B.A., Syracuse University, Syracuse, New York 1951 M.A., Syracuse University 1951-70 Personnel Staff Officer, United States Air Force 1970-71 Research Associate, Human Resources Research Organization, Alexandria, Virginia 1971-73 Counselor, Project Transition, U.S. Army, Wurzburg, West Germany 1972- Lecturer, Sociology, University of Maryland, College Park, Maryland 1973-76 Graduate Student, University of Southern California, Los Angeles, California 1973- Education Services Officer, U.S. Army, Kitzingen, West Germany PAGENO="0583" 3203 (~~) ~pTES POSE~ RICH*RD~M'BRowN MM "`~ `~` `~ ~"L1 ~ : ~ TORRANCE CA 90505 western ~ iviahgram ~ 2.023179E274 09/30/76 ICS IPMRNCZ CSP WSHB VETERANS' 1FiAISC~~I 2137466818 MOM TDRN LOS ANGELES CA 200 09.30 ~ SENATOR HARTXE ,3~ LJL.)L~-~J LI L6LJ US SENATE ~JASHINGT0N, DC. 20510 T WASHINGTON DC 20510 THE MEMBERS OF NAIMES WOULD LIKE TO CONVEY TO YOU AND YOUR COMMITTEE THEIR APPRECIATION FOR YOUR EFFORTS ON BEHALF OF THE VETERANS AND SERVICEMEN. WE APPLAUD THE INCREASED BENEFITS TO VETERANS UNDER EDUCATION PROGRAMS IN PROGRESS~ EXTENDED BENEFITS FROM 36.45 MONTHSI CONTINUANCE OF'~HE PREP PROGRAM, A~D INCREASE IN~EDUCATI0NAL LOANS. THESE ARE ALL VERY POSITIVE. WE BELIEVE, HOWEVER, THAT TERMINATION OF PRESENT ELIGIBILITY `FOR BENEFITS OF CHAPTER 4 WILL BE DETRIMENTAL AND IMPACT ADVERSELY ON MILITARY `RECRUITMENT, `THE EDUCATIONAL PROGRAM, THE INDIVIDUAL INSTITUTION AND THE SOCIETY AT LARGE. WE `DO NOT BELIEVE THE SUBSTITUTE POST1VIETNAM' AIR READJUSTMENT ASSISTANT PROGRAM IN ITS PRESENT FORM WILL ATTRACT SUFFICIENT PARTICIPATION, WE ALSO STRONGLY OPPOSE THE PROVISIONS OF TITLE 7 WHICH PROHIBITS THE STUDENTS FROM USING THE POWER OF ATTORNEY. THE INSTITUTION AND THE INDIVIDUAL WILL `SUFFER BECAUSE OF LONG DELAYS IN VA REIMBURSEMENT TO THE STUDENT. WE URGE YOU THEREFORE TO SERIOUSLY CONSIDER THE MODIFICATION OF THE PRESENT BILL IN LIGHT OF THE IMPLICATIONS ABOVE. SINCERELY, RICHARD K BROWN PRESIDENT NATIONAL ASSOCIATION OF INSTITUTIONS FOR MILITARY EDUCATION SERVICES 11148 EST MGMCOMP MOM PAGENO="0584" 3204 Ni~~~46t ~t~4 t/t~s~ Oi~j~i4y4Z~ 11~ 1010 Vermont Ave., N. W, Suite 718 Washington, D.C. 20005 (202)638-2399 Mr. Jack Wicks, Associate General Counsel Veterans' Affairs Committee Russell Bldg. - Suite 414 Washington, D.C. 20510 Dear Mr. Wicks, Pursuant to our conversation I am forwarding to your office our recommendations and suggestions concerning S.969. Recommendations: 1. Non-profit and veteran service organizations should be allowed to sponsor Educational Trust Funds and Educational Insurance Programs -- for disadvantaged veterans. The program should be eligible for the two for one dollar match as provided for in chapter 32, subchapter 2, section 1622, part B of Title 38 United States code. 2. The minimum contribution by a participant should be lowered to $25 per month. Further, the total maximum contribution amount should be increased to $3,600. Finally, we suggest that the language of this legislation include all veteran organizations for eligibility in administering the programs. We are looking forward to hearing from you and stand ready to assist. Sincerely yours, ~?~J~J Richard N. Hamilton, Executive Director cjh Aaron E. Henry Chairman of the Board Richard N. Hamilton Executive Director Robert C. Penn National President W. Paul Taylor Secretary Treasurer PAGENO="0585" 3205 [Subsequently, the following materials concerning Flight Training was ordered placed in the record at this point:] THE LIBRARY OF CONGRESS Congressional Research Service WASHINGTON, D.C. 20540 LEGISLATIVE HISTORY OF FLIGHT TRAINING UNDER ThE GI BILL The World War II CI Bill (Public Law 78-346) as originally enacted, did not authorize payment in excess of the rate of $500 for an ordinary school year, or $0.588 per hour. Charges made by flight schools for instruction in light planes ranged from $6 to $12 per hour. Thus, under the original law if a veteran elected to pursue a flight training course he wath required to pay personally the difference between the hourly charge of $6 to $12 and the $0.588 maximum that the law authorized the Veterans Administration to pay on his behalf. Therefore, prior to the amendment of Public Law 78-346 by Public Law 79-268, the number of veterans entering flight training could be accorno- dated by the relatively small number of flight schools in existence at the beginning of the veterans' training program. After P.L. 79-268 removed the ceiling of $500 for an ordinary school years there was an immediate increase in the number of flight schools through- out the country and a marked increase in the number of veterans electing to pursue flight training courses. In many cases, it was alleged that veterans were pursuing these courses for avocational and recreational purposes with a resultant high cost to the Federal Government. This situation was recognized. by Congress, and on June 30, 1948, Public Law 80-862 was enacted which prohibited the Veterans Administration from awarding benefits to veterans where the Admini- strator determined the course tobe for avocational or recreational purposes. PAGENO="0586" ~2O6 As a result of the action taken by the Administrator under the authority of P.L. 80-862, there was a marked decline in veteran enrollment in schools offering courses which could be avocational or recreational in character. By example, veteran enrollment in flight training, which had increased from 70,772 in Noveaber 1946 to 124,249 in November 1947, declined-to 30,950, as of October 31, l949.~J Flight training under the Korean Conflict CI Bill (Public Law 82-550) was covered under section 242 (g). Such allowance was computed at the rate of 75% of the charges required to be paid by similarly circumstanced non- veterans enrolled in the same flight course. A veteran whose program of education or training consisted of flight training and other education or training was able, in addition to the allowance for flight training, to receive the allowance prescribed for the other education or training. If the veteran's training consisted exclusively of flight training he was not able to receive am allowance under any other provision of the act. Under this sub- section, the period of entitlement of every veteran pursuing flight training was reduced by 1 day for each $1.25 which was paid to the veteran as an edu- cation and training allowance for his flight-trainlng course. This reduction to his entitlement was in addition to any other charge against entitlement made on account of other education or training taken by the veteran; for example, this allowed a veteran to pursue a full-time course in aeronautical engineering in a college and to take flight training as a required part of that course (provided that the flight course was an approved part of the veteran's education and training program), but this entitlement was charged ~ under the servicemen's readjustment act, as amended, from the Administrator of Veterans Affairs, House Veterans Affairs Committee Print 210, 81st Congress, 2d session. PAGENO="0587" 3207 ~both fur the full-time course of aeronautical engineering and 1 day for each $1.25 wh±di the veteran was paid as an education and training allowance for the flight course. These payments were made on a monthly basis upon certifi- cation to the VA by the veteran and the institution as to the actual flight training received. According to the House Report on P.L. 82-550 (H. Rapt. 82-1942): "...The provisions of this section which make it possible for a veteran to pursue flight training under certain circumstanc~es are in no way intended to set aside the concept of the program of education or training defined in section 201 [section 201 (3) defined the term "program of educa- tion or training" as any single unit course or subject, any curriculum, or any combination of unit courses or subjects, which is generally accepted as necessary to fulfill requirements for the attainment of a predetermined and identified educational, professional, or vocational objective]..." Under the original Cold War CI Bill (P.L. 89-358) there were no provi- sions for flight training, however, they were added by amendments made by P.L. 90-77, section 302 (b). The VA report on H.R. 1382 on this particular section is as follows: ~** .Our exper1ence in the administration of flight training programs under previous laws has not been satisfactory. One of the primary objections to the inclusion of flight training in a readjustment education program is that a considerable amount of such training was found to be of an avocational or recreational nature. In order for a flight training course to be approved under the Korean Conflict GI bill, it had to lead to a predetermined and identified objective. The objec- tive of becoming a commercial pilot was the first that could - be attained in flight training which was recognized as an employment objective in the industry. However, since a pri- vate pilot course is an integral part of a commercial pilot course, veterans could, if they chose, complete only that phase of their authorized commercial pilot course. Under such PAGENO="0588" 3208 circumstances, the flight training-pursued would, in effect, be purely avocational or recreational in nature. Thus, with- out some change in the program to insure its educational effectiveness, we cannot recoimnend legislation which would provide such training in a manner identical to that provided under the Korean GI bill. In view of the general interest which has been expressed with respect to flight training, we believe the question of whether a sound program can be developed, warrants study. In - the Pres~dex. January 31 message to the Congress relating to `America's Servicemen and Veterans,' (in addition to his specific recommendations), he stated he was directing the Administrator of Veterans' Affairs, in consultation with lead- ing veterans' groups, to conduct a comprehensive study of the compensation, pension, and benefits system for veterans, their families and survivors. This study group was directed to recommend to him, by January 1968, proposals `to assure that our tax dollars are being utilized most wisely and that our Government is meeting fully its responsibilities to all those to whom we owe so much.' Pursuant to this mandate, we are including as a segment of this overall study, a study concern- ing the propriety of providing flight training for post-Korean conflict veterans. The necessity or desirability of paying a reporting allowance to educational institutions under the new educational program will also be considered. Under these circumstances, you will appreciate that I am not in a position to make specific recommendations with respect to the merits of the last two mentioned proposals at this time and I, therefore, urge that your Committee withhold action with respect to those matters until the presidentially- directed study is completed."~/ The provisions for flight training enacted by P.L. 90-77 were as follows: FLIGHT TRAINING - - Sec. 302. (a) Section 1673 (b) of title 38, United States Code, is amended to read as follows: "(b) Except as provided in section 1677 of this title, the Administrator shall not approve the enrollmei~t of an eligible veteran in any course of flight training other than one given by an educational institutiop of higher learning for credit toward a standard college degree the eligible veteran is seeking." - ~T U.S. Congress. House Veterans Affairs Committee Print No. 37, 90th Congress. PAGENO="0589" 3209 (b) Subchapter III of chapter 34, United States Code, is amended by adding at the end thereof a new section as follows: "Sec. 1677. Flight training "(a) The Administrator may approve the. pursuit by an eli- gible veteran of flight training generally accepted as neces- sary for the attainment of a recognized vocational objective in the field of aviation, subject to the following conditions: "(1) the eligible veteran must possess a valid private pilot's license or must have satisfactorily completed the number of hours of flight training instruction required for a private pilot~5 license, and meet the medical require- ments necessary for a commercial pilot's license; and "(2) the flight school courses must meet the Federal Aviation Administration standards and be approved both by that Agency and the appropriate State approving agency. "(b) Each eligible veteran who is pursuing a program of edu- cation consisting exclusively of flight training approved as meeting the requirements of subsection (a) hereof, shall be paid an educational assistance allowance to be computed at the rate of 90 per centum of the established charges for tuition and fees which similarly circumstanced nonveterans enrolled in the same flight course are required to pay. Such allowance shall be paid quarterly upon receipt of a certification from the eligible veteran and the institution as to actual flight training received by, and the cost thereof to, the veteran during such quarter. In each such case the eligible veteran's period of entitlement shall be charged with one month for each $130 which is paid to the veteran as an educational assistance allowance for such course." (underscoring supplied) In part, the recommendations of the Veterans Administration were carried out in Public Law 90-631, section 5, which amended the second sentence of 1677 (b) (quoted above) to read as follows: "Such allowance shall be paid monthly upon receipt of a certification from the eligible veteran and the Institution as to the actual flight training received by, and the cost thereof to, the veteran during such month." 78-226 0101.3 PAGENO="0590" 3210 We were unable to find any discussion of this amendment in either the House or Senate Reports on H.R. 16025. Public Law 91-219 section 102 increased the amount payable from $130 monthly to $175. However, the Veterans Administration responded to a request for a report on another education bill, and commented extensively on the flight training program as follows: "...Section 1677 (a)(l) of title 38 currently provides that - a veteran may be enrolled in a course of flight training when he either possesses a private pilot's license or has satisfactorily completed the number of hours of flight train- ing instruction required for a private pilot's license. Federal Aviation Administration regulations generally pro- vide for completion of 40 hours of instruction for issuance of a private pilot's license. There is no standard among the various flight schools as to the composition of the courses to be taken and of the mix of the amount of ground training and of flight instruction and experience. It has been reported to us by many State approving agencies that, in most cases, those who have qualified for commercial pilot's training with only having fulfilled the requirement of the equivalent in instruction time were generally not as well trained or as well qualified as those possessing pri- vate pilot's licenses. As a result, flight schools often have to request exceptions to their established programs to extend the commercial training time so that the less quali- fied could be given additional training. The proposed amend- ment to this section would eliminate students from taking training based on qualifying by equivalent hours of training. Requiring a private pilot's license as a condition to enroll- ment as an eligible veteran should improve the safety factor. This is true because individuals issued a private pilot's license have had that quality and variety of flight training that was necessary in their individual case to permit them to pass a test evidencing a minimum level of competency. We are * advised by the Federal Aviation Administration that in their most recent survey they found the average number of hours of flight training taken by individuals passing a private pilot's PAGENO="0591" 3211 test was 66 hours. Forty hours of flight training with no requirement for a proper mix in the type of instruction, for instance cross country, usually will not equip an individual to pilot a plane with a minimum level of competency. With 66 hours the average for those able to meet Federal Aviation Administration standards and 40 hours the minimum required before testing, it can be seen that there are many who will require twice the minimum number of 40 hours to reach a safe proficiency level. - Any need for an equivalency in flight hours would seem to have served its purpose at this point in time. When the pro- vision for vocational flight training was enacted, there were a large number of veterans who had been discharged with ser- vice since F~bruary 1, 1955, some of whom may have had a con- siderable amount of flight training instruction without having reduced their learning to a private pilot's license. The time intervening since this benefit was made available on October 1, 1967, has permitted these individuals interested in pursuing commercial flight training to enter and begin their flight training. Newcomers to the group of eligibles could be expected to have fewer hours of training and thus need the discipline of a prescribed course and the sanction of demonstrated ability to pass a test establishing a minimum level of competency. . . Public Law 92-540 again increased the allowance from $175 to $220 and struck out all after the word "certification" (as amended by P.L. 90-631 and quoted on page 5) down to the period and inserted in lieu "as required by section 1681 (c) of this title." This amendment was contained in the Senate amendment to H.R. 12828, but there was no discussion of this provision in the Senate Report or in the House consideration on the Floor. The rates were again increased by Public Law 93-508, section 102 from $220 to $260 and then by Public Law 93-602, section 2Q3 (a) which raised the rates to $270. 3Tii~S. Congress. House V~~~ns Affairs Committee Print No. 19, VA Report on H.R. 6798, 91st Congress. PAGENO="0592" 3212 We have been unable to find any references to the legislative history of flight training in the bills from the 93rd Congress in the form of agency reports or committee prints. Ilona N. Rashkow Education and Public Welfare Division July 14, 1976 PAGENO="0593" 3213 SIKORSKY AIRCRAFT STRATFORD. CONNECTICUT 06602 June 9, 1976 The Honorable Vance Hartke United States Senate Washington, D. C. 20510 Dear Senator Hartke: I understand Senate Bill 3109 has been introduced proposing a reduction in veterans' educational benefits. This bill would eliminate flight training and correspondence courses as educa- tional benefits. Such legislation should be opposed on the grounds that a veteran has earned these readjustnent educational benefits and should have the right to select the type of train- ing best suited to achieve his civilian employment objectives. The Aviation Forecasts, FY 1976 - 1987, prepared by the Federal Aviation Administration predicts a substantial growth within the aviation industry over the next decade. This growth will create many employment opportunities for well-trained and qual- ified people. As an example, the number of active pilots is expected to increase from 730,51t0 in 1975 to 1,001,200 in 1980, or a 37% increase over the next five years. The elimination of flight training as an educational benefit could slow the growth of employment opportunities within the industry and will have a serious impact on aircraft operating safety. The active air- craft fleet in the United States numbered l8L~,025 in 1975 accord- ing to Federal Aviation Administration records. Of this number, general aviation accounted for 161,9142 aircraft. The air carriers and military accounted for 1% and 11% of the total fleet, respect- ively. Total hours flown in 1975 were 145,020,000. Hours flown by general aviation were 32,14114,1400. The military and commercial air carriers accounted for 15% and 114%, respectively, of total hours flown in 1975. The general aviation fleet is composed of those aircraft used by corporations to transport employees and supplies; commercial 78-226 0 - 77 - 38 (Pt.4) PAGENO="0594" 3214 aircraft involved in the transportation of personnel and equip- ment of other organizations; aircraft operated by flight training institutions which provide basic and advance pilot training; and aircraft owned by individuals for personal use. Government forecasts for 1987 predict the size of the U. S. active fleet to number 279,844 aircraft and will fly 76,1450,000 hours. General aviation aircraft are predicted to number 257,456 aircraft and fly 60,395,500 hours. In contrast, the number of military aircraft is expected to decline slightly. This is an indication that the number of military trained pilots seeking civilian employment within general aviation will also decline. Many pilots employed in general aviation have used their veterans' educational benefits to offset the cost of initial and advance flight training. Former military pilots now employed within general aviation have also used their veterans' educational benefits to upgrade skill levels and acquire additional pilot ratings, thereby improving their employment opportunities. The flight training educational benefits will have a greater significance in the future since the number of pilots undergoing training in the military and the number of pilots leaving military service have decreased during the past several years and the need for pilots in general aviation is expected to increase. The expected increase in commercial helicopter operations in general aviation is a good example of this point. During the past decade, the helicopter's unique operating capability has proven to be a fast and efficient means of transporting personnel and equipment in the development of our natural resources. During the sane period, corporate aviation has recognized the efficiencies provided by the helicopter as a means of employee transportation. The type of helicopter used in these applications were normally flown by a single pilot, under visual flight conditions over relatively short distances. Over the next decade, the type of helicopters used in these applications will be predominantly those aircraft flown by two pilots over medium distances and capable of flying under instrument conditions. We expect the size of the helicopter fleet supporting these two applications to increase by 98% over the next decade, PAGENO="0595" 3215 Veterans will be able to improve their employment opportunities by using the educational benefits to acquire helicopter and/or instrument flight ratings. Very truly yours, ~J.Tobias GJT:jcd cc: Mr. C. MacGregor PAGENO="0596" 3216 POLICY P.O. Box 4412 * Washington, D.C. 20017 SER VING AIR TAXI AND COMMERCIAL PILOTS THROUGHOUT THE WORLD July 16, 1976 Senate Committee on Veterans Affairs 414 Russell Senate Office Building Washington, DC 20510 Attn: Senator Flartke Mr. Guy McMichael This letter is forewarded in support of amendments to veterans assistance programs which permit v5terans to receive flight training. We support S-969, Amendment 2005 (Sec. 205, Title II) which would eliminate flight training benefits. Our support arises from two basic areas of concern: 1. Abuses of benefit programs in flight training have been widely publicized (Mews American, Baltimere, 1975). It is well known in the industry that such abuses exist in two areas: a) Aircraft are being purchased partially with VA assistance: The veteran purchases an aircraft from the flight school or other dealer, leases his aircraft back to the flight school, enrolls in training, and thence utilizes VA money to rent back his own aircraft for his own training and the training of other veterans. The veteran is being paid by the VA to rent his own aircraft. This accounts for about two-thirds of his training cost;the plane is paid for by the VA after 500 hours of total rental time which generally occurs after a year. b) Aircraft are being rented by veterans for pleasure flying (ie: Bahamas, etc.). These long trips with families, etc. are called "cross country training flights as required by 14 CFR 6l~". It is apparent from this practice and the state of the commercial aviation job market that a great number of these veterans have no intention of entering aviation as a pilot. 2. The pilot job market is oversaturated with commercial or airline transport pilot certificate holders. During 1974 FY only there were 25,504 pilots in training under VA assistance for commercial or airline transport pilot certificates. This one y~g~ training total is equivalent to the total number of commercial pilots in the entire airline (air carrier) industry. Airlines have had long layoff groups of pilots awaiting re-employment for the past several years, with little or no hope of hiring from the public at large in the future. PAGENO="0597" 3217 2.(con't) During the period June 1, 1966 to June 30, 1974 there have been 114,252 pilots trained beyond the private pilot certificate and ratings under VA assistance. (Chapter 34). This number of trained pilots is estimated to be twice the total number of pilot lobs available throughout the country in all commercial aviation (airlines, commuters, air taxis, corporate, patrol, schools, etc). Federal Aviation Administration figures indicate that there are 189,269 certificated commercial pilots and 41,840 certificated airline transport pilots, a total of 231,109 employable pilots. ("Review of Federal Aviation Administration Activities,"FY 1975). This represents more than four times the possible available jobs, or four times the total nomber of flying jobs in existence. In addition to the above facts we are concerned that these problems are being ignored by the Veterans Administration. The Vietnam Era Veterans' Readjustment Assistance Act of 1974, Public Law 93-508, Section 105, specifically directs the Administrator of the VA to investigate and report any "difficulties and abuses being experienced in carrying out tuition assistance in flight training . Notwithstanding this specific congressional direction no such investigation or report on flight training has been accomplished or is intended by the VA. The "Education Tuition Assistance Study" completed by the VA in November, 1975 in response to Section 105 of the Act, contains no reference to flight training as is specifically required by the Act. In additicn there is evidence that there is little or no VA enforcement of Section 203 of the Act requiring employment verification of graduates. It is apparent that the voluntary, self-supplied reports required by DVB Circular 20-74- 113 (Appendix B) and DVB Circular 22-74-6 are more often inaccurate and false than true figures of employment. It is also apparent that the Compliance Surveys prescribed by DVB Manual M-22-2 are not being conducted on flight schools as required or that they are ineffective in determining compliance. In summary it is becoming quite obvious that flight training for veterans under the CI Bill does not provide the veteran with an opportunity for employment. Many veterans realize this too late and are left without the education he needs to become gainfully employed. Once benefits have been spent on flight training the veteran finds himself in worse condition than he would have been had he left the military without benefits. He is older, poorer, and without recent job experience. In most cases the flight trained veteran is less employable than he was at discha~e. Therefo we fully support the termination of flight training ~ earliest possible date. Presiden PAGENO="0598" 3218 AIR LINE PILOTS ASSOCIATION 1B25 MASSACHUSETTS AVENUE NW. 0 WASH~NGT0N,D.C.2003B 0(202)797-4000 \TTER~NS' AFFA~~ ~ AUG02 1976 UTrILI hi J J V/ASH!:~JToN, 2C. 20.~1D July 30, 1976 The Honorable Vance Hartke United States Senate 313 Russell State Office Building Washington, 0. C. 20510 It has been brought to my attention that your Amendment No. 2005 to S-969 would terminate veterans flight training, effective October 1, 1976. The veterans program assistance for flight training has provided opportuni- ties for thousands who have airline careers today, as well as those who have utilized the program to upgrade their skills and gain higher ratings. The premature and arbitrary ending of this program would affect the future careers of thousands of veterans who are choosing or are currently flying in commercial aviation. I understand your Amendment makes extensive and positive changes to our veterans program. Consequently, it is an extreme disappointment that flight training is to be terminated. I would respectfully urge you to reconsider your position on this matter. Sincerely, (>1 0' Donnell, President JJO'D:mh 78226 0897 SCHEDULE WITH SAFETY ~ AFFILIATED WITH AFL.CID PAGENO="0599" 3219 AIRCRAFT OWNERS AND PILOTS ASSOCIATION/WASHINGTON, D.C. 20014/ThI: (301) 6540500/RIb), 100DIs: AOPA,WlshIog)Co, D.C. VETERANS' TFFA~I~ Au~tfr~i~Yi976 AUGO41~7~ t1ASf-~;)~, :... Senator Vance Hartke 313 Russell Senate Office Building Washington, D.C. 20510 Dear Senator Hartke: The Veterans' Affairs Committee, on which you serve, will shortly mark up S.969, the Veterans Education and Employ- ment Assistance Act. Also under consideration will be Amend- ment No. 2005 which contains a provision, Section 205, to elim- inate flight training as an educational program available under the Act. AOPA, in behalf of its 185,000 members, strongly opposes deletion of the option of flight training as an educational benefit available to qualified veterans. Since World War II countless veterans have found flight training a useful and rewarding educational experience. Some have obtained employment as professional pilots. Others have made use of the knowledge and skill in the pursuit of vocational endeavors where flying was an ancillary aid. It is apparent that opportunities for fruitful use of flying skills will in- crease in the future. The veteran should not be deprived of this option for enhancing.his earning capabilities. Opponents of flight training benefits have contended that veterans utilize such benefits for mainly recreational purposes. This contention fails to match with two facts. (1) To qualify for the training assistance the veteran must already possess a private pilot certificateand that is all that is necessary for purely recreational flying. (2) Seventy percent of the schools giving flight training retained eligibility despite a require- ment to demonstrate that at least 50% of their graduates in the preceding two years have found training related jobs. a We urge you to vote against the termination of flight training.as an optional benefit. Cordial Robert E. Monroe, Vice Preside Policy and Technical Planning PAGENO="0600" 3220 LIIIIIII7I2JINATIONAL Jillillil/ AIR 11/ TRANSPORTATION /11 ASSOCIATIONS ~ August 2, 1976 Mr. Guy H. McMichael DELIVERED BY HAND General Counsel Committee on Veterans' Affairs United States Senate 411 Russell Senate Office Building Washington, DC 20510 Dear Mr. McMichael: On behalf of the industry which the National Air Transportation Associations, Inc., (NATA) represents, I wish to express a very strong opposition to the provision of Amendment No. 2005 to S.969, "Veterans Education and Employment Assistance Act of 1976", which terminates authority for new enrollments in flight training effective October 1, 1976. NATA represents the interests of over three thousand Airport Service Operators (FBOs) nationwide. These are small businesses vhich operate the nations flight schools as well as support the operations of more than 714,000 certificated pilots and 153,000 civil aircraft serving air taxi, commuter airline, and in many cases, scheduled airline operations. FBOs show a labor force in excess of 150,000 full- time employees, or about two thirds of the entire general aviation industry. The overall provisions of Amendment 2005 to S.969 appear to have been well thought out with the exception of terminating enrollments for flight training. Termination of these benefits is in direct contradiction to the title of the Bill, - "...Employment Assistance Act...". Every other VA program provision cited extends, increases, improves, and expands benefits with the exception of flight training. This provision is a grave injustice for many reasons. First of all, to deny the right of a veteran in the pursuit of his personal ambitions is a very prejudicial act on the part of Congress. There is no VA benefit program that has the high degree of educational and personal satisfaction as does flight training, It represents a logical, practical and timely means to new elements of transportation, communication, exploration, and economic development in the decades ahead, which will assure this country's continued world leadership in all facits of aviation. As this association has expressed to the Veterans' Affairs Committee several times before, a VA flight training student must be highly motivated. To even be eligible for flight training benefits the veteran must first have obtained a private pilots SERVING THE AIRCRAFT NEEDS OF OTHERS... IN THE AIR AND ON THE GROUND PAGENO="0601" 3221 Letter to Mr. McMichaei Page 2 August 2, 1976 license with his or her own funds at an average cost of $1,300 and then pay 10 percent for the upgraded flight training courses. I dare say there are few, if any, VA educational programs which demand competency in accordance with federal laws (Federal Air Regulations) and so much from the veteran before any benefits are received. The termination of this program is highly unjust to the veteran who seeks a career in which aviation is his direct or ancillary cornerstone to becoming a successful taxpaying citizen. The proponents of termination cannot justify the inference that the majority of flight training courses tend to serve avocational, recreational, and/or personal en- richment. Last year Public Law 93-508 mandated by Congress a survey of all flight schools to determine the facts. It was directed that at least 50 percent of graduates in the preceding two years had to be in training related jobs or the ~choo! would lose VA certification. After years of being maligned and demeaned, flight training was proven to be overwhelmingly successful and beneficial. The results were that 70 percent of the 1,499 flight schools surveyed retained eligibility and only 28 percent of the 7,637 individual flight courses failed to meet the 50 percent qualification. These are the facts as reported by the Veterans Administration. It clearly shows that the majority of Veterans who took flight training courses are em- ployed in jobs which are beneficially related to it. Proponents for termination have stated that "opportunities for employ -nent in commercial aviation for flight school graduates are limited" because thure are some furloughed pilots "who will be given preference in any hiring by the airlines". The commuter, air taxi, agricultural, corporate, and government pilots are pro- fessional commercial pilots by their own right. Employment opportunities in these areas are numerous. A falicy of this proposal being included in this Amendment is that recently the Congress saw fit to authorize appropriations for the Veterans Administration which included the funds necessary to run the VA flight training program. In conclusion, we believe that the provision in Amendment 2005 to S.969 to ter- minate the authority for new enroHmem~ ir flight training effective October 1, 1976 is not in line with the original objective of the GI Bill, "assist the veteran in adjusting from military to civilian life by helping them get the training and education they need to obtain employment in the career of their choice". Your assistance in this matter would be very much appreciated. We are prepared to provide more information to you and your staff as to why the proposal should be rejected. Sincerely, ,a0~~) David B. Evans Director of Operatiors & Airport Services PAGENO="0602" 3222 J /`1i M4t~ I fl~ KE ~4/' ~21L2~ At?~9~N ~ /?~vYAL. ~ M;cI/J7~o7~ (Ydur Name and Address) Honorable Vance Hartke VETERANS' AFFAIRS COMM. United States Senate ~ nnrm Washington, D.C. 20510 jJJ .~L_LLL.~iLLJ1J1 Dear Senator Hartke: f ~ SEP08 1976 I i-~ ~ /Z ~iri~' I am writing~t~a-~e your amend S Education and Employment Assistance Act ~ which would eliminate VA benefits for flight training as of October 1, 1976. Certainly one of the objectives of the original Act (S-969) is to assist American veterans, who have honorably served our country, in obtaining the skills required of a respect- able profession. Certainly few professions afford the challenge and opportun- ity that is experienced by the American aviator. Few pro- fessions require the degree of intense training and demon- strated proficiency. To deny an American veteran of the right to choose flying as a career would not only be restricting the growth of American aviation by contributing to a shortage of qualified pilots, but would also deny the individual freedom of a prestigious class of Americans to select the profession of their choice. Please reverse your position on this aspect of the legisla- tion, and send me a copy of your proposed amendment. Sincerely, X,z~ ~ (Your Signature) PREPARED BY THE AMERICAN AVIATION FOUNDATION, INC. ~ ~I ~ fIyJ,v6 ,`/o ~5 ~ /7~ ~ PAGENO="0603" 3223 ~F~t~S CO'~ VE1~~ç~ ~ VIASHtNGTO Honorable Vance Hartke United States Senate Washington, D.C. 20510 Dear Senator. H~tke: I am writing ,~ ~±t±on to your amendment of the Veterans Education ant/Employment Assistance Act of 1976 (S-969) which would eliminate VA benefits for flight training as of October 1, 1976. Certainly one of the objectives of\the original Act (S-969) is to assist American veterans, whO have honorably served our country, in obt~Lning tha skilis~~ui d of a resp Ct- ~le Pr~ron.~e~ h~ ~ C~jnly few proi~~ a ord the llen e and opportun- it~ `that is experience by e Americ aviator. Few pro- fessions require the degree of intense training and demon- strated proficiency. To deny an American veteran of the right to choose flying as a career would not only be restricting the growth of American aviation by contributing to a shortage of qualified pilots, but would also deny the individual freedom of a prestigious class - - * the profession of i ~ the~,r Please tion, and Sincerely~ £14' c~t~ ~ PREPARED BY THE AMERICAN AVIATION FOUNDATION, INC. PAGENO="0604" 3224 ~ll~r~W/~/ P. 0. Box 522, Rapid City, SD 57701 AC 605-342- 7520 Aircraft Sales and Rental, Main Offices: Rapid City Regional Airport Flight Instruction, JOHN F. WELCH, President Air Taxi and Charter September 27~1~2~ VETEr ~J Chairman \~`Y' - Committee on Veterans Affairs United States Senate \~\ ~:~` Senate Office Building Washington, D.C. 20510 Dear Senator: Senator Abourezk has provided me with a copy of excerpts from your Report No. 94-1243. Dy special concern is for veterans whose vocational ob- jective is professional pilot. Present law requires that a veteran may not enroll under VA auspices in a flight training course in an approved flight school, unless at least 15% of training in advanced courses, given in the last 30 days, was given to students not under VA auspices. This often causes a delay in the veteran's beginning training because of the sporadic nature of the relative percentages. For some months the ratio can run 50%, and then for two or three months the 15% ratio is not met, and no one may enroll under the Gl Bill. Non veterans are likely to enroll for a course and complete it in minimum time, providing a surge in non VA flight time. The typical veteran is still on active duty, or is employed full time to support himself and family while he is training, so he flies less often. A number of such students, however, maintains an even level of operation for them, keeping the percentage high so that no new vet- erans may enroll until another surge is provided by a non- veteran. The solution I see is to go to a longer period of time for computing the percentage ratio, at least six months, or perhaps a year. Enrollment of veterans could then level out, and a veteran would be able to enroll when he chooses. Present law also requires that 50% or more of persons graduating from a flight training course at the school in the last two years must be employed as pilots, or no GRUMMAN AMERICAN AVIATION__________________________________ DEALER PAGENO="0605" 3225 veterans may enroll under VA auspices. There are two reasons why this works an injustice on the veteran who wishes to enroll in a particular school. First of all, a new graduate of all the pilot courses available, no matter how "sharp" he is or how good the flight school is, has a very difficult time finding a full time job as a pilot. What he lacks is the experience level demanded of new employees by prospective employers. If he is ever to reach the experience level he must have, he must pay for additional flying time out of his own pocket, and find work elsewhere to support himself and family un- til he can meet the experience requirements, for full time employment. That is pretty difficult to do in two years. Five years would be more realistic in applying-the 50% rule to flight training. Secondly, many non veterans who take advanced flight courses have been flying, most likely in conjunction with a business or profession. They want to add to their skills as an ad- junct to their use of flying, but have no intention of ac- cepting employment as professions], pilots. Counting them can also prevent enrollment by an eligible veteran. I know these views are tolate to be considered for the Committee's recent work, but they should be kept in mind for future actions. Sincerely, John F. Welch PAGENO="0606" PAGENO="0607" APPENDIX A Calendar No. 1179 94TH CONGRESS 1 `4ENATE f REPORT 2d Session f 1. No. 94-1243 VETERANS' EDUCATION AND EMPLOYMENT ASSISTANCE ACT OF 1976 REPORT OF THE COMMITTEE ON VETERANS' AFFAIRS UNITED STATES SENATE TO ACCOMPANY S. 969 SEPTEMBER 16, 1976.-Ordered to be printed U.S. GOVERNMENT PRINTING OFFICE 73~-958 WASHINGTON: 1976 (32~27) PAGENO="0608" 3228 COMMITTEE ON VETERANS' AFFAIRS VANCE HARTKE, Indiana, Chairman HERMAN E. TALMADGE, Georgia CLIFFORD P. HANSEN, Wyoming JENNINGS RANDOLPH, West Virginia STROM THURMOND, South Carolina ALAN CRANSTON, California ROBERT T. STAFFORD, Vermont RICHARD (DICK) STONE, Florida JOHN A. DURKIN, New Hampshire FRANK J, BRIZZI, Staff Director Gv~ H. McMICHAISL III, General Coun8el SUBCOMMITTEE ON READJUSTMENT, EDUCATION, AND EMPLOYMENT VANCE HARTKE, Indiana, Chairman HERMAN B. TALMADGE, Georgia ROBERT T. STAFFORD, Vermont ALAN CRANSTON, California STROM THURMOND, South Carolina JOHN A. DURKIN, New Hampshire (H) PAGENO="0609" 3229 CONTENTS Page Committee amendments 1 Introduction 19 Summary of provisions of 5. 969, as amended 21 Basic purpose 21 Summary of provisions 22 Background and discussion: Veterans' Administration educational assistance programs 26 Participation rates 30 Need for increases in educational assistance benefits 32 Additional 9 months of unrestricted eligibility 34 Expanded VA education loan program 34 Vocational rehabilitation for disabled veterans 41 Benefits for survivors and dependents 43 VA education program administration amendments to curb abuse and overpayments 46 IJnemployment among disabled and Vietnam era veterans 52 Post-Vietnam era veterans' readjustment assistance 60 Cost estimates 73 Tabulation of votes cast in committee 74 Section-by-section analysis and explanation of 5. 969, as amended 74 Title I Title II 78 Title III Title IV 102 Title V 113 Title VI 136 Title VII 147 Agency reports 151 Changes in existing law made by S. 969, as amended 282 Charts, entitled- Chart 1.-Persons in training under GI bill, successive Aprils and Novembers 31 Chart 2.-State expenditures for higher education as a percentage of State personal income, 1973-74 36 Chart 3.-Personsin ti~fning ~Inder chapter 35 45 Chart 4.-Compositionof the 18-year-old male population, fiscal years 1972-85 65 Tables, entitled- Table 1.-Veteran trainees under the current GI bill cumulative through fiscal year 1975 by type of training 27 Table 2.-Survivors and dependents-trainees under the current GI bill cumulative through fiscal year 1975 by type of training 28 Table 3.-GI bill participation by program, through May 1976 30 Table 4.-Three GI bills-total number trained, level of training and cost (comparison for World War II, Korean conflict, post-Korean and Vietnam era) 30 Table 5.-U.S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index 32 Table 6.-Chronology of actual and proposed educational assistance rates Table 7.-Dependency status for veterans in training, November l975-comparison for current GI bill by peace time post-Korean and Vietnam era veterans 33 (III) 78-226 0 - 77 - 39 (Pt.4) PAGENO="0610" 3230 Page Table 8.-Estimated average charges (current dollars) per full-time undergraduate resident degree-credit student in institutions of higher education, or institutional type and control: United States, 1960-61 to 1975-76 Table 9.-Chapter 34: Participation rate for Vietnam-era veterans by State and type of training (cumulative through April 1976) 37 Table 10.-Distribution of tuition and fees (per school year) for full- time trainees by type of trainees 38 Table 11.-Federal student aid programs focused on undergraduates__ 39 Table 12.-Chapter 31: Training time, dependents, for all in training-- 42 Table 13.-Chapter 35: Dependents educational assistance 44 Table 14.-Employment service performance indicators ranked by State 53 Table 15.-Service to veterans and others based on employment security automated reporting system (ESARS)-fiscal year 1975_~ 55 Table 16.-Blacks, as a percentage of enlisted accessions 63 Table 17.-Percentage of black enlisted persons within major occupa- tionalgroups 64 Table 18.-Selected examples of annual compensation and benefits for militarypersonnel 71 Table 19.-Comparison of military and civilian compensation and benefits (Oct. 1, 1975, pay scales) 72 Table 20.-Five-year cost of S. 969, as amended 74 Table 21.-Veterans whose VA vocational rehabilitation was termi- nated June 30, 1975, by service period and degree of disability 76 Table 22.-Chapter 31: Extension of delimiting date 77 Table 23.-Participation under farm cooperative training programs during Vietnam era through April 1976 79 Table 24.-Veterans as a percentage of students enrolled in institu- tionsofhigherlearning 89 Table 25.-Chapter 34: Veterans counseled, fiscal year 1974-76 95 Table 26.-Usefulness of training as indicated by completers and non- completers Table 27.-9 months additional eligibility for chapter 35 trainees 100 Table 28.-Vietnam era veterans participation in apprenticeship and on-job training, by field of training (October 1967-June 1975, cumulative) 113 Table 29.-8 percent increase for apprenticeship/OJT 114 Table 30.-VA education loans 115 Table 31.-Reporting fee increase 126 Iv PAGENO="0611" 3231 Calendar No. 1179 94~m CONGRESS ~ SENATE REPORT ~3d,S'eesion ç No. 94-1243 VETERANS' EDUCATION AND EMPLOYMENT ASSISTANCE ACT OF 1976 SEPTEMBER 16, 1976.-Ordered to be printed Mr. STAFFORD (for Mr. HARTKE), from the Committee on Veterans' Affairs, submitted the following REPORT [To accompany S. 969] The Committee on Veterans' Affairs, to which was referred the bill (5. 969) to amend chapter 34 of title 38, United States Code, to extend the basic educational assistance eligibility for veterans under chapter 34 and for certain dependents under chapter 85 from 36 to 45 months, having considered the same, reports favorably thereon with an amendment in the nature of a committee substitute and an amendment to the title and recommends that the bill, as amended, do pass. CoM~mvr,~ A~~n~rs The amendments are as follows: Strike out all after the enacting clause and insert the following: That this Act may be cited as the "Veterans' Education and Employment Assistance Act of 1976". TITLE I-CHApTER 31: DISABLED VETERANS' VOCATIONAL REHABILI- TATION RATE AND PROGRAM ADIUSTMENTS Suc. 101. The table contained In section 1504(b) of title 38, United States Code, Is amended to read as follows: (1) PAGENO="0612" 3232 "Column I Column II No Column Ill One Column IV Two Column V More than two . Type of training dependents dependent dependents dependents The amount in column IV, plus the following for each dependent In excess of two: Institutional: Full-time Three-quarter-time Half-time Farm cooperative, apprentice, or other on-job training: Full-time $226 170 113 197 $280 210 140 238 $329 247 165 275 $24 18 12 18". SEC. 102. Section 1503(c) of title 38, UnIted States Code, is amended by striking out ", but not beyond ten years after such termination date, or June 30, 1975, whichever date is the later," and inserting in lieu thereof "when such action is determined by the Administrator to be necessary for such veteran based upon such veteran's disability and need for vocational rehabilitation,". Suc. 103. SectIon 1511 of title 38, United States Code, is amended by adding at the end thereof the following: "Notwithstanding any other provision of law, the facilities of any agency of the United States, as designated in clause (3) of this section, may be used to provide unpaid training or work experience as part or all of a veteran's program of vocational rehabilitation when the Administra- tor determines such training or work experience to be necessary to accomplish vocational rehabilitation. While pursuing such training or work experience, an uncompensated veteran shall be deemed an employee of the United States for the purposes of the benefits of chapter 81 of title 5 but not for the purposes of laws administered by the Civil Service Commission.". SEC. 104. Chapter 31 of title 38, Uni.ted States Code, Is amended- (1) by striking out in the second sentence of section 1502(b) "hIm" and in- serting in lieu thereof "the veteran"; (2) by striking out in subsections (a) and (b) of section 1503 "his", "he", and "him" each time they appear and inserting in lieu thereof "the veteran's", "the veteran", and "the veteran", respectively; (3) by striking out In section 1503(c) "him" and "he" each time they appear and inserting in lieu thereof "the veteran" and by striking out "his" the first and second time It appears and inserting in lieu thereof "the vet- eran's" and "the veteran", respectively; (4) by striking out in subsections (a) and (c) of section 1504 "hIs" and "him" and inserting in lieu thereof "the veteran's" and "the employer", respectively; (5) by striking out in section 1505 "he" and "his" and inserting in lieu thereof "the Administrator" and "the veteran's", respectively; (6) by striking out In section 1507 "hIm" and inserting in lieu thereof "the Administrator"; (7) by striking out in section 1508 "he" and inserting in lieu thereof "the Administrator"; (8) by striking out in section 1509(a) "hIm", "his", and "he" each time they appear and inserting in lieu thereof "the veteran", "the veteran's", and "the veteran", respectively; (9) by striking out in section 1509(b) "he" and Inserting in lieu thereof `~the Administrator"; (10) by striking out In section 1510 "he" each time It appears and Insert- ing in lieu thereof "such person" ; and (11) by striking out In section 1511 "he" and Inserting In lieu thereof "the Administrator". TITLE 11-VETERANS' EDUCATION RATE AND PROGRAM ADJUSTMENTS SEC. 201. Chapter 34 of title 38, United States Code, Is amended- (1) by amending the table contained in paragraph (1) of section 1682 (a) to read as follows: 2 PAGENO="0613" 3233 "Column I Column II No Column III Column IV Column V Type of program dependents One dependent Two dependents More than two dependents * The amount In column IV, plus the following for each dependent In Institutional: Full-time Three-quarter-time $292 219 $347 , $396 excess of two: $24 Half-time 146 260 297 18 Cooperative 235 174 276 198 313 12 18"; (2) by striking out in section 1682(b) "$270" and Inserting In lieu thereof "$292"; (3) by amending the table contained in paragraph (2) of section 1682(c) to read as follows: "Column I Column II No Column Ill Column IV Column V Basis dependents One dependent Two dependents More than two dependents . The amount In column IV, plus the following for each dependent in Full-time Three-quarter-time $235 176 $276 $313 excess of two: $18 Half-time 118 207 138 235 157 14 9"; and (4) by striking out In section 1696(b) "$270" and Inserting In lieu thereof "$292". SEe, 202, Section 1652 of title 38, United States Code, Is amended by adding at the end thereof the following new subsections: "(f) For the purposes of this chapter and chapter 36 of this title, the term `institution of higher learning' means a college, university, or similar institution, Including a technical or business school, offering postsecondary level academic instruction that leads to an associate or higher degree If the school Is em- powered by the appropriate State education authority under State law to grant an associate or higher degree, When there is no State law to authorize the granting of a degree, the school may be recognized as an institution of higher learning if it is accredited for degree programs by a recognized accrediting agency, Such term shall also include a hospital offering educational programs at the postsecondary level without regard to whether the hospital grunts a postsecondary degree, "(g) For the purposes of this chapter and chapter 36 of this title, the term `standard college degree' means an associate or higher degree awarded by (1) an institution of higher learning that Is accredited as a collegiate institution by a recognized regional or national accrediting agency; or (2) an institution of higher learning that is a `candidate' for accreditation as that term is used by the regional or national accediting agencies; or (3) an institution of higher learning upon completion of a course which Is accredited by an agency recog- nized to accredit specialized degree-level programs, For the purpose of this sec- tion, the accrediting agency must be one recognized by the Commissioner of Education under the provisions of section 1775 of this title,", SEC. 203, Section 1661 of title 38, United States Code, is amended- (1) by striking out, in the second sentence of subsection (a) all after "period of" the second time it appears and inserting in lieu thereof "45 months (or the equivalent thereof in part-time educational assistance)."; (2) by inserting in subsection (a) "or served for a period of less than 18 months after such date and received a medical discharge because of service- connected disabilities," after "active duty obligation,"; and `3 PAGENO="0614" 3234 (3) by amending subsection (c) to read as follows: "(c) Except as provided in subsection (b) and in subchapters V and VI of this chapter, no eligible veteran shall receive educational assistance under this chapter in excess of 45 months.". SEC. 204. Section 1602 (a) of title 38, United States Code, is amended by insert- ing immediately before the period at the end thereof the following: "; except that in the case of any eligible veteran who was prevented from initiating or completing such veteran's program of education within such time period because of a physical or mental disability which was not the result of such veteran's own willful misconduct, such veteran shall, upon application, be granted an extension of the applicable delimiting period for such length of time as the Administrator determines, from the evidence, that such veteran was prevented from initiating or completing a program of education.". SEc. 205. (a) The Administrator shall carry out a study of the vocational objective programs approved for the enrollment of veterans and other eligible persons under chapters 31, 34, 35, and 36 of title 38, United States Code. The study shall include the extent to which such programs are in compliance with the applicable provisions of such chapters particularly the requirements of section 1673 (a) (2) of that title. (b) The findings and report of such study with respect to the provisions of section 1673 (a) (2) of such title shall include, but shall not `be limited to- (1) the number of veterans and institutions submitting justification asserting compliance with the requirements of such section and the extent to which any courses were challenged or disqualified by a State approving agency or by the Veterans' Administration; (2) the number of institutions and courses for which justification showing compliance with the requirements of such section was not submitted; (3) the number of courses for which justification showing compliance with the requirements of this section was submitted and actively reviewed by either the appropriate State approving agency or by the Veterans' Administration; (4) the extent to which courses subject to the requirements of sudi section have not been identified or surveyed; (5) the extent to which vocational objective programs have been con- verted to degree programs following enactment of Public Law 93-508; (6) information as to completion rates of those courses submitting place- ment reports pursuant to such section; (7) the extent to which justification submitted pursuant to such section disclosed invalid survey population; (8) the extent to which justification submitted pursuant to such section disclosed improper exclusion of students who completed the course but did not take or pass a licensing examination given by the State; (9) the extent to which justification submitted pursuant to such section disclosed improper exclusion of persons employed in other fields; (10) the extent to which justification submitted pursuant to such section disclosed improper exclusion of persons as being in closely related occupa- tions, when in fact they were not; (11) the extent to which justification submitted pursuant to such section disclosed improper exclusion of some persons as not being a~ailable for employment; (12) the extent to which there are deficiencies in basic procedures, instruc- tions, and forms issued pursuant to such section; and (13) the extent to which vocational objective programs are being pursued for avocational or recreational purposes. (c) The Administrator shall report the results of the study carried out under this section to the Congress and the President not later than 180 days after the date of enactment of this Act and shall include in such report any recommenda- tions for legislative or administrative action the Administrator deems appro- priate. SEC. 206. Section 1673 of title 38, United States Code, is amended- (1) by striking out at the end of subsection (a) (2) "or"; (2) by striking out the period at the end of subsection (a) (3) and Insert- ing in lieu thereof"; or"; (3) by adding at the end of subsection (a) a new clause (4) as follows: "(4) any independent study program except one leading to a standard college degree."; and (4) by amending subsection (d) to read as follows: 4 PAGENO="0615" 3235 "(d) The Administrator shall not approve the enrollment of any eligible vet- eran not already enrolled, In any course (other than one offered pursuant to subchapter V or subchapter VI of this chapter or any farm cooperative training course) for any period during which the Administrator finds that 4nore than 85 per centum of the students enrolled in the course are having all or part of their tuition fees, or other charges paid to or for them by the educational Institution, by the Veterans' Administration under this title and/or by grants from any Federal agency. The Administrator may waive the requirements of this sub- section with respect to grants from any Federal agency upon the recommendation of the Secretary of Health, Education, and Welfare if the Administrator de- termines it to be In the interest of the eligible veteran.". SEC. 207. SectIon 1674 of title 38, United States Code, Is amended by inserting Immediately after the first sentence thereof the following: "Progress will be considered unsatisfactory at any time the e1igible veteran is not progressing at a rate that will permit such veteran to graduate within the approved length of the course based on the training time as certified to the Veterans' Adminis- tration unless the Administrator finds there are mitigating circumstances.". SEC. 208. Section 1682. of title 38, UnIted States Code, Is amended by adding a new subsection (e) at the end thereof as follows: "(e) The educational assistance allowance of an eligible veteran pursuing an independent study program which leads to a standard college degree shall be computed at the rate provided in subsection (b) (2) of this section. In those cases where independent study Is combined with resident training and the resi- dent training constitutes the major portion of such training, the maximum allow- ance may not exceed the full-time institutional allowance provided under sub- section (a) (1) of this section.". SEC. 209. Section 1685(b) of tItle 38, United States Code, Is amended by adding at the end thereof the following: "In the event the veteran ceases to be a full- time student before completing such agreement, the veteran may, with the ap- proval of the Administrator, be permitted to complete such agreement.". SEC. 210. Section 1692 of title 38, United States Code, is amended- (1) by adding at the end of subsection (a) thereof the following: "A veteran enrolled in and pursuing an institutional or technical course not leading to a standard college degree, who has not received a high school di- ploma or equivalency certificate, may, subject to such regulations as the Administrator shall prescribe, be entitled to receive tutorial assistance. Such assistance shall be limited to the academic portions of such a course and may not be granted In connection with the laboratory or shop portions or to any courses provided under section 1691 or section 1695 of this title."; and (2) by striking out in subsection (b) "$60" and "$720" and Inserting In lieu thereof "$65" and "$780", respectively. SEC. 211. Chapter 34 of title 38, United States Code, is amended- (1) by striking out In section 1652(e) "United States Code,"; (2) by striking out in subsections (a) and (b) of section 1681 "section 1780" and inserting in lieu thereof "chapter 36"; (3) by redeslgnating section 1697A as section 1698; and (4) by striking out in the table of sections at the beginning of such chap- ter "1697A" and inserting in lieu thereof "1698". SEC. 212. Chapter 84 of title 38, United States Code, Is amended- (1) by striking out in subsections (a) and (d) of section 1652 "he" and "wife" and inserting in lieu thereof "such individual" and "spouse", respectively: (2) by striking out in section 1661 (a) "his" and "he" each time they appear and inserting in lieu thereof "the veteran's" and "the veteran", respectively; (8) by striking out In subsections (a), (b), and (d) of section 1662 "his" and "he" each time they appear and inserting in lieu thereof "the veteran's" and "the veteran", respectively; (4) by striking out in section 1663 "he" each time it appears and inserting In lieu thereof "the Administrator"; (5) by striking out in section 1670 "him" each time it appears and in- serting in lieu thereof "the veteran"; (6) by striking out in section 1671 "he" the first time it appears and Inserting in lieu thereof "the Administrator", by striking out "he" the second time it appears and inserting in lieu thereof "the veteran or per- son", and by striking out "his" each time it appears and inserting in lieu thereof `the veteran's or person's"; PAGENO="0616" 3236 (7) by striking out in section 1673(a) "be" and "his" and inserting in lieu thereof "the Administrator" and "the veteran's", respectively; (8) by striking out in section 1674 "his" and "he" each time they appear and inserting in lieu thereof "the veteran's" and "the Administrator", respectively; (9) by striking out in section 1676 "his" and "he" and inserting in lieu thereof "the Administrator's" and "the Administrator", respectively; (10) by striking out in section 1681 (a) "his" and inserting in lieu thereof "the veteran's"; (11) by striking out in section 1685(c) "he" and "his" each time they appear and inserting in lieu thereof "the Administrator" and "the veteran's", respectively; (12) by striking out in section 1691(a) "his" and "he" each time they appear and inserting in lieu thereof "the veteran's" and `~the veteran", respectively; (13) by striking out In section 1696(a) "he" and inserting In lieu thereof "the Administrator"; and (14) by striking out in subsections (a) and (b) of section 1698 (as re- designated by section 211(3) of this Act) "he" and "his" and inserting in lieu thereof "the Administrator" and "such person's", respectively. SEC. 213. Section 1663 of title 38, United States Code, is amended- (1) by striking out the first sentence and inserting in lieu thereof: "The Administrator shall make available to any eligible veteran, upon such vet- eran's request, comprehensive counseling services, including but not limited to, vocational and educational counseling and testing."; and (2) by adding at the end thereof the following: "The Administrator shall carry out an effective outreach program to acquaint all eligible vet- erans with the availability of said counseling, its benefits and advantages.". TITLE Ill-CHAPTER 35: SURVIVORS' AND DEPENDENTS' EDUCA- TIONAL ASSISTANCE RATE AND PROGRAM ADJUSTMENTS SEC. 301. Chapter 35 of title 38, United States Code, is amended- (1) by striking out in section 1732(b) "$217" and inserting in lieu thereof "$235"; and (2) by amending subsection (a) of section 1742 to read as follows: "(a) While the eligible person is enrolled in and pursuing a full-time course of special restorative training, the parent or guardian shall be entitled to receive on behalf of such person a special training allowance computed at the basic rate of $292 per month. If the charges for tuition and fees applicable to any such course are more than $02 per calendar month, the basic monthly allowance may be increased by the amount that such charges exceed $92 a month, upon election by the parent or guardian of the eligible person to have such person's period of entitlement reduced by one day for each $9.76 that the special training allowance paid exceeds the basic monthly allowance.". SEC. 302. Section 1701 (a) of title 38, United States Code, is amended by adding at the end thereof the following new paragraphs: "(10) For the purposes of this chapter and chapter 36 of this title, the term `institution of higher learning' means a college, university, or similar institution, including a technical or business school, offering postsecondary level academic instruction that leads to an associate or higher degree if the school is empowered by the appropriate State education authority under State law to grant an asso- ciate or higher degree. When there is no State law to authorize the granting of a degree, the school may be recognized as an institution of higher learning if it is accredited for degree programs by a recognized accrediting agency. Such term shall also inclm3e a hospital offering educational programs at the postsec- ondary level without regard to whether the hospital grants a postsecondary degree. "(11) For the purposes of this chapter and chapter 36 of this title, the term `standard college degree' means an associate or higher degree awarded by (A) an institution of higher learning that is accredited as a collegiate institution by a recognized regional or national accrediting agency; or (B) an institution of higher learning that is a `candidate' for accreditation as that term is used by the regional or national accrediting agencies; or (0) an institution of higher learn- ing upon completion of a course which is accredited by an agency recognized to accredit specialized degree-level pi~ograms. For the purpose of this section, the accrediting agency must be one recognized by the Commissioner of Education under the provisions of section 1775 of this title.". 6.- PAGENO="0617" 3237 SEc. 303. Section 1711 of title 38, United States Code, is amended- (1) by striking out in subsection (a) "thirty-six" and inserting in lieu thereof "45"; and (2) by striking out in subsection (b) "nine" and inserting in lieu thereof "12". SEC. 304. Section 1712 of title 38, United States Code, is amended- (1) by striking out in clauses (3) and (4) of subsection (a) "five" each time it appears and inserting in lieu thereof "8"; (2) by amending clause (5) of subsection (a) to read as follows: "(5) (A) if such person is enrolled in an educational institution regularly operated on the quarter or semester system and such period ends during a quarter or semester, such period shall be extended to the end of the quarter or semester; or "(B) if such person is enrolled in an educational institution operated on other than a quarter or semester system and such period ends after a major portion of the course is completed, such period shall be extended to the end of the course, or until 12 weeks have expired, whichever first occurs."; and (3) by repealing subsection (d) and redesignating subsections (e), (f) and (g), as subsections (d), (e), and (f), respectively. SEC. 305. Section 1713 of title 38, United States Code, is amended to read as follows: "The parent or guardian of a person (or the eligible person if such person has attained legal majority) for whom educational assistance is sought under this chapter shall submit an application to the Administrator which shall be in such form and contain such information as the Administrator shall prescribe. If the Administrator finds that the person on whose behalf the application is submitted is an eligible person, the Administrator shall approve the application provision- ally. The Administrator shall notify the parent or guardian or eligible person (if the person has attained legal majority) of the provisional approval or of the disapproval of the application.". SEC. 306. Section 1723(a) of title 38, United States Code, is amended- (1) by striking out at the end of clause (2) "or"; (2) by striking out at the end of clause (3) the period and inserting In lieu thereof "; or"; and (3) by adding at the end thereof a new clause (4) as follows: "(4) any independent study program except one leading to a standard college degree.". SEC. 307. Section 1724 of title 38, United States Code, is amended by inserting immediately after the first sentence thereof the following: "Progress will be considered unsatisfactory at any time an eligible person is not progressing at a rate that will permit such person to graduate within the approved length of the course based on the training time as certified to the Veterans' Administration unless the Administrator finds there are mitigating circumstances.". SEC. 308. Section 1~32(c) of title 38, United States Code, is amended by add- ing a new paragraph (3) at the end thereof as follows: "(3) The monthly educational assistance allowance to be paid on behalf of an eligible person pursuing an independent study program which leads to a standard college degree shall be computed at the rate prescribed in section 1682(e) of this title." SEC. 309. (a) The title of chapter 35 of title 38, United States Code, is amended by striking out "CHAPTER 35-WAR ORPHANS' AND WIDOWS' EDUCATIONAL ASSISTANCE" and inserting In lieu thereof "CHAPTER 35--SURVIVORS' AND DEPENDENTS' EDUCATIONAL ASSISTANCE" (b) The table of chapters at the beginning of title 38, United States Code, and the table of chapters at the beginning of part III of such title are each amended by striking out "35. War Orphans' and Widows' Educational Assistance 1700" and inserting in lieu thereof "35. Survivors' and Dej?endents' Educational Assistance 1700". 7 PAGENO="0618" 3238 (c) Section 1731 (a) is amended by striking out "section 1780" and inserting in lieu thereof "chapter 36". SEC. 310. Chapter 35 of title 38, United States Code, is amended- (1) by striking out in section 1700 "widows", "wives", and "his" each time they appear and inserting in lieu thereof "surviving spouses", "spouses", and "the veteran's", respectively; (2) by striking out in section 1701(a) "widow" and "wife" each time they appear and inserting in lieu thereof "surviving spouse" and "spouse", respectively; (3) by striking out in section 1701(b) "his" and inserting in lieu thereof "the person's" and by striking out "himself"; (4) by striking out in section 1701 (c) "his" each time it appears and inserting in lieu thereof "such person's" and by striking out "himself"; (5) by striking out in section 1701(d) "he" each time it appears and inserting in lieu thereof "such person"; (6) by striking out in section 1711(b) "she" the first time It appears and inserting in lieu thereof "the spouse", by striking out "her" each time It appears and inserting in lieu thereof "such person's", and by striking out "be or she" each time it appears and inserting in lieu thereof "such person"; (7) by striking out in section 1712(a) "him", "his", and "he" each time they appear and inserting in lieu thereof "the person", "the person's", and "the person", respectively; (8) by striking out in section 1712(c) "him", "he", "his" each time they appear and inserting in lieu thereof "such person", "such person", and "such person's", respectively; (9) by striking out in subsections (e) and (f) of section 1712 (as re- designated by section 304(3) of this Act) "her" and "he" and inserting in lieu thereof "the" and "such person", respectively; (10) by striking out in section 1720(a) "his" each time it appears and inserting in lieu thereof "such person's"; (11) by striking out in section 1721 "he" and inserting in lieu thereof "the Administrator"; (12) by striking out in section 1723(a) "he" and "his" and inserting in lieu thereof "the Administrator" and "the person's", respectively; (13) by striking out in section 1723(c) "his" and "he" and inserting in lieu thereof "the Administrator's" and "the Administrator", respectively; (14) by striking out in section 1723(d) "his" each time it appears and inserting in lieu thereof "such person's"; (15) by striking out in section 1724 "he" the first time It appears and inserting in lieu thereof `such person", by striking out "his" each time it appears and inserting in lieu thereof "the person's", and by striking out "he" the second time it appears and inserting in lieu thereof "the Admin- istrator"; (16) by striking out in section 1731(b) "his" and "he" and inserting in lieu thereof "the person's" and "the person", respectively; (17) by striking out in section 1733(a) "wife or widow" and "she" and inserting in lieu thereof "spouse or surviving spouse" and "such spouse", respectively; (18) by striking out in section 1733(b) "he" and Inserting in lieu thereof. "such person"; (19) by striking out in section 1734(b) "wife or widow" and inserting in lieu thereof "spouse or surviving spouse"; (20) by striking out in section 1736 "he" and inserting in lieu thereof "the Administrator"; (21) by striking out in section 1741(b) "he" and inserting In lieu thereof "the Administrator"; (22) by striking out in subsections (a) and (b) of section 1743 "his" and "he" each time they appear and inserting in lieu thereof "the Administra- tor's" and "the Administrator", respectively; (23) by striking out in section 1761(a) "be" and Inserting In lieu thereof "the Administrator"; and (24) by striking out in section 1763 "his" and inserting in lieu thereof "such person's". 8 PAGENO="0619" 3239 TITLE IV-POST-VIETNAM ERA VETERANS' READJUSTMENT ASSISTANCE ACT SEC. 401. This title may be cited as the "Post-Vietnam Era Veterans' Readjust- ment Assistance Act of 1977". SEC. 402. Section 1652 of title 38, United States Code, is amended-- (1) by amending paragraph (1) of subsection (a) to read as follows: "(1) The term `eligible veteran' means any veteran who- "(A) served on active duty for a period of more than 180 days, any part of which occurred after January 31, 1955, and before January 1, 1977, and was discharged or released therefrom under conditions other than dishonor- able; or "(B) contracted with the Armed Forces and was enlisted in or assigned to a reserve component prior to January 1, 1977, and as a result of such enlistment or assignment served on active duty for a period of more than 180 days, any part of which commenced within 12 months after January 1, 1977, and was discharged or released from such active duty under conditions other than dishonorable; or "(C) was discharged or released from active duty, any part of which was performed after January 31, 1955, and before January 1, 1977, or follow- ing entrance into active service from an enlistment provided for under clause (B) of this paragraph, because of a service-connected disability."; and (2) by inserting in subsection (a) (2) "or (B)" after "paragraph (1) (A) ". SEC. 403. Section 1661(a) of title 38, United States Code, Is amended by adding at the end thereof a new sentence as follows: "In the case of any person serving on active duty on December 31, 1976, or a person whose eligibility is based on section 1652(a) (1') (B) of this chapter, the ending date for computing such person's entitlement shall be the date of such person's first discharge or release from active duty after December 31, 1976.". SEC. 404~ Part III of title 38, United States Code, Is amended by inserting im- mediately after chapter 31 of such title a new chapter as follows: "CHAPTER 32-POST-VIETNAM ERA VETERANS' READJUSTMENT ASSISTANCE "SUBCHAPTER 1-puaposs; DEFINITIONS "Sec. "1601. Purpose. "1602. Definitions. "SUBCHAPTER Il-ELIGIBILITY; CONTRIBUTIONS; AND MATCHING FUND - "1621. Eligibility. "1622. Contributions; matching fund. "1623. Refunds of contributions upon disenroliment. "1624. Death of participant. "1625. Discharge or release under conditions which would bar use of benefits. "SUBCHAPTER Ill-ENTITLEMENT; DURATION "1631. Entitlement; loan eligibility. "1632. Duration; limitations. "SUBCHAPTER TV-ADMINISTRATION "1641. Requirements. "1642. Outreach efforts. "1643. Reporting requirements. "1644. Deposits; reports. `~Subchapter I-Purpose; Definitions "~ 1601. Purpose "It is the purpose of this chapter (1) to provide educational assistance to those men and women who enter the Armed Forces after December 31, 1976, (2) to assist young men and women in obtaining an education they might not otherwise be able to afford, and (3) to promote and assist the all volunteer military pro- gram of the United States by attracting qualified men and women to serve in the Armed Forces. "~ 1602. Definitions "For the purposes of this chapter- "(1) (A) ~The term ~eligible veteran' means any veteran whO (1) inItially 9 PAGENO="0620" 3240 entered military service on or after January 1, 1977, served on active duty for a period of more than 180 days commencing on or after such date, and was dis- charged or released therefrom under conditions other than dishonorable, or (ii) initially entered military service on or after January 1, 1977, and was discharged or released from active duty after such date for a service-connected, disability. "(B) The requirement of discharge or release, prescribed in subparagraph (A), shall be waived in the case of any participant who has completed his or her first obligated period of active duty (which began after December 31, 1976) or 6 years of active duty (which began after December 31, 1076), whichever period isless. "(C) For the purposes of subparagraphs (A) and (B), the term `active duty' does not include any period during which an individual (i) was assigned full time by the Armed Forces to a civilian institution for a course' of education which was substantially the same as established courses offered to civiilans, (ii) served as a cadet or midshipman at one of the service academies, or (iii) served under the provisions of section 511(d) of title 10 pursuant to an enlistment In the Army National Guard or the Air National Guard, or as a Reserve for service in the Army Reserve, Naval Reserve, Air Force Reserve, Marine Corps Reserve, or Coast Guard Reserve. "(2) The terms `program of education' and `educational institution' shall have the same meaning ascribed to them in sections 1652(b) and 1652(c), respec- tively, of this title. "(3) The term `participant' is a person who is participating in the educational benefits program established under this chapter. "Subchapter TI-Eligibility; Contributions; and Matching Fund "~ 1621. Eligibility "(a) Each person entering military service on or after January 1, 1977, shall have the right to enroll in the educational benefits program provided by this chapter (hereinafter in this chapter referred to as the `program' except where the text indicates otherwise), at any time during such person's service on active duty. When a person elects to enroll in the program, such person must participate for at least 12 consecutive months before disenrolling or suspending participation. "(b) The requirement for 12 consecutive months of participation required by subsection (a) of this section shall not apply when (1) the participant suspends participation or disenrolls from the program because of personal hardship as defined in regulations issued jointly by the Administrator and the Secretary of Defense (hereinafter in this chapter referred to as the `Secretary'), or (2) the participant is discharged or released from active duty. "(c) A participant shall be permitted to suspend participation or disenroll from the program at the end of any 12-consecutive-month period of participation. If participation is suspended, the participant shall be eligible to make additional contributions to the program under such terms and conditions as shall be pre- scribed by regulations issued jointly by the Administrator and the Secretary. "(d) If a participant disenrolls from the program, such participant forfeits any entitlement to benefits under the program except as provided in subsection (e) of this section. A participant who disenrolls from the program is eligible for a refund of such participant's contributions as provided in section 1623 of this title. "(e) A participant who has disenrolled may be permitted to reenroll In the program under such conditions as shall be prescribed jointly by the Administra- tor and the Secretary. "~ 1622. Contributions; matching fund "(a) Each person electing to participate in the program shall agree to have a monthly deduction made from such person's military pay. Such monthly deduc- tion shall be in any amount not less than $50 nor more than $75 except that the amount must be divisible by 5. Any such amount contributed by the participant or contributed by the Secretary pursuant to subsection (c) of this section shall be deposited in a special educational funding account (hereinafter in this chapter referred to as the `fund') to be established in the Treasury of the United States. Contributions made by the participant shall be limited to a maximum of $2,700. `(b) Except as otherwise provided in this chapter, each monthly contribution made by a participant under subsection (a) shall entitle the participant to matching funds from the Veterans' Administration at the rate of $2 for each $1 contributed by the participant. 10 PAGENO="0621" 3241 "(c) The Secretary is authorized to contribute to the fund of any participant such contributions as the Secretary deems necessary or appropriate to encourage persons to enter or remain in the Armed Forces. The Secretary is authorized to issue such rules and regulations as the Secretary deems necessary or appropriate to implement the provisions of this subsection. "~ 1623. Refunds of contributions upon disenroliment "(a) Contributions made to the program by a participant may be refunded only after the participant has disenrolled from the program or as provided in section 1624. "(b) If a participant disenrolls from the program prior to discharge or release from active duty, such participant's contributions will be refunded on the date of the participant's discharge or release from active duty or within 60 days of receipt of notice by the Administrator of the participant's disenroliment, which- ever is later, except that refunds may be made earlier in instances of hardship or other good reason as prescribed in regulations issued jointly by the Admin- istrator and the Secretary. "(c) If a participant disenrolls from the program after discharge or release from active duty, the participant's contributions shall be refunded within 60 days of receipt of an application for a refund from the participant. "(d) In the event the participant (1) dies while on active duty, (2) dies after discharge or release from active duty, or (3) disenrolls or is disenrolled from the program without having utilized any entitlement, the participant may have accrued under the program, or, in the event the participant utilizes part of such participant's entitlement and disenrolls or is disenrolled from the program, the amount contributed by the Secretary under the authority of section 1622(c) remaining in the fund shall be refunded to the Secretary. "~ 1624. Death of participant "(a) If a participant dies, the amount of such participant's unused contribu- tions to the fund shall be paid (1) to the beneficiary or beneficiaries designated by such participant under such participant's Servicemen's Group Life Insurance policy, or (2) to the participant's estate if no beneficiary has been designated under such policy or if the participant is not insured under the Servicemen's Group Life Insurance program. "(b) If a participant dies after having been discharged or released from active duty and before using any or all of the contributions which the participant made to the fund, such unused contributions shall be paid as prescribed in subsection (a) of this section. "~ 1625. Discharge or release under conditions which would bar the use of benefits "If a participant in the program is discharged or released from active duty under dishonorable conditions, such participant is automatically disenrolled and any contributions made by such participant shall be refunded to such participant on the date of such participant's discharge or release from active duty or within 60 days from receipt of notice by the Administrator of such discharge or release, whichever is later. "Subchapter IH-Entitlement; Duration "~ 1631. Entitlement; loan eligibility "(a) (1) A participant shall be entitled to a maximum of 36 monthly benefit payments (or their equivalent in the event of part-time benefit payments). "(2). The amount of the monthly payment to which any eligible veteran is entitled shall be ascertained by (A) adding all contributions made to the fund by the eligible veteran, (B) multiplying the sum by 3, (C) adding all contribu- tions made to the fund for such veteran by the Secretary, and (D) dividing the sum by the lesser of 36 or the number of months in which contributions were made by such veteran. "(3) Payment of benefits under this chapter may be made only for periOds of time during which an eligible veteran is actually enrolled in and pursuing an approved program of education and, except as provided in paragraph (4), only after an eligible veteran has been discharged or released from active duty. (4) Payment of benefits under this chapter may be made after a participant has completed his or her first obligated period of active duty (which began after December 31, 1976) or 6 years of active duty (which began after Decem- ber 31, 1976), whichever period is less. ~1~1 PAGENO="0622" 3242 ~`(b) Any member of the Armed Forces participating in the program shall be eligible to participate in the Predischarge Education Program (PREP) author- ized by subchapter VI of chapter 34 of this title. "(c) When an eligible veteran is pursuing either a program of education under this chapter by correspondence or a program of flight training, such eligible veteran's entitlement shall be charged at the rate of 1 month's entitlement for each month of benefits paid to the eligible veteran (computed on the basis of the formula provided in subsection (a) (2) of this section). "(d) Eligible veterans participating in the program shall be eligible for educa- tion loans authorized by subchapter III of chapter 36 of this title in such amounts and on the same terms and conditions as provided in auch subchapter, except that the term `eligible veteran' as used In such subchapter shall be deemed to include `eligible veteran' as defined in this chapter. "~ 1632. Duration; limitations "No educational assistance benefits shall be afforded an eligible veteran under this chapter beyond the date of 10 years after such veteran's last discharge or re- lease from active duty. In the event an eligible veteran has not utilized any or all of such veteran's entitlement by the end of. the 10-year period, such eligible veteran is automatically disenrolled and any contributions made by such veteran remaining in the fund shall be refunded to the veteran following notice to the vet- eran and an application by the veteran for such refund. If no application is re- ceived within 1 year from date of notice, it will be presumed for the purposes of subsection (a) of section 725s of title 31, that the individual's whereabouts is unknown and the funds shall be transferred as directed in the last proviso of that subsection. "Subchapter IV-Administration "~ 1641. Requirements "The provisions of sections 1663, 1670, 1671, 1673, 1674, 1676, 1677, 1681(c), 1683, 1685. 1695, 1696, 1697, and 1698 of this title and the provisions of chapter 36 of this title, with the exception of sections 1777, 1780(c), and 1787, shall be applicable to the program. "~ 1642. Outreach efforts "The Administrator shall designate an appropriate official of the Veterans' Administration who shall cooperate with and assist the Secretary (or any official designated by such Secretary as administratively responsible for such matters) in carrying out an effective outreach program to acquaint all persons entering or considering entry into the Armed Forces with the benefits and advantages of the program provided for in this. chapter. The outreach program shall be designed to advise and counsel each person entering and each person considering entry into the Armed Forces on or after January 1, 1977, with respect to the benefits and advantages of enrollment in the program. "~ 1643. Reporting requirements "The Administrator and the Secretary shall, within 90 days after the date of enactment of this chapter, submit to the Oommittees on Veterans' Affairs of the Senate and House of Representatives a joint report containing their respective plans for implementation of the program provided for in this chapter. The Administrator and the Secretary shall submit to such committees a report each ~`ear detailing the operations of the program (including outreach efforts) during the preceding year. The first such annual report shall be submitted 15 months after the date of enactment of this section. "~ 1644. Deposits; reports "Deductions made by the Department of Defense from the military pay of any participant shall be promptly transferred to the Administrator for deposit in the fund. The Secretary shall also submit to the Administrator a report each month showing the name, service number, and the amount of the deduc- tion made from the military pay of each initial enrollee, any contribution made by the Secretary pursuant to section 1622 (c), as well as any changes in each participant's enrollment and/or contribution. The report shall also include any additional information the Administrator and the Secretary deem necessary to administer this program. The Administrator shall maintain accounts show- ing contributions made to the fund by individual participants and by the Secre- tary as well as disbursements made from the fund in the form of benefits.". 12 PAGENO="0623" 3243 SEc. 405. The table of chapters at the beginning of title 38, United States Code, and the table of chapters at the beginning of part III of such, title are each amended by inserting immediately below "31. VOCATIONAL REHABILITATION 1501" the following: "32. POST-VIETNAM ERA VETERANS' READrUSTMENT ASSISTANCE 1601". SEC. 4043. The provisions of this title shall become effective on January 1, 1977. SEC. 407. In the event that legislation is enacted after the date of enactment of this Act providing for the involuntary induction of persons into the Armed Forces under the Military Selective Service Act (or other corresponding legisla- tion)- (1) any individual entering military service on or after the effective date ~f such law shall be eligible to accrue entitlement to the benefits provided by chapter 34 of title 38, United States Code but shall not be eligible under the * provisions of chapter 32 of such title (provided in section 404 of this Act); and (2) any participant in the program provided for in chapter 32 of such title shall have the right to elect to continue his participation under the provisions of such chapter or to come under the provisions of chapter 34 of title 38, United States Code. Election by the participant under clause (2) of the first sentence of this see- tio.n shall be made, in such manner as shall be prescribed in regulations issued jointly by the Administrator of Veterans' Affairs and the Secretary of Defense, after the participant has been notified of the right to elect between the two programs. The election of any participant under this section may be changed at any time before the receipt of any educational benefit payment under either chapter 32 or 34 of title 38, United States Code, but the election becomes ir- revocable upon receipt by such participant of any such payment. In the event a participant under chapter 32 of title 38, United States Code, elects to come under the provisions of chapter 34 of such title (A) such participant shall be deemed to have disenrolled under such chapter 32 and such participant's contri- butions to the matching fund shall be refunded as provided in such chapter, and (B) such participant's eligibility for benefits under chapter 34 of such title shall accrue from the date that involuntary induction into the Armed Forces is re- instituted by law. If any participant under chapter 32 of title 38, United States Code, fails to make an election between the two programs within the time prescribed in the joint regulations issued under the second sentence of this section, such participant shall be deemed to have elected to come under chapter 34 of title 38, United States Code. TITLE V-CHAPTER 36: EDUCATION LOAN AND PROGRAM ADMINISTRATION AMENDMENTS SEC. 501. Chapter 36 of title 38, United States Code, is amended- (1) by striking out in section 1786(a) (2) "$270" and inserting In lieu thereof "$292"; and (2) by amending the table contained in paragraph (1) of section 1787(b) to read as follows: "Column I Column II No Column Ill One Column IV Two Column V More than two Periods of training dependents dependent dependents dependents The amount in column IV, plus the following for each dependent in excess of two: First 6 months Seco'~d 6 months $212 159 $238 185 $260 207 $11 11 Third 6 months Fourth and any succeeding 6-month periods 106 53 132 79 154 101 11 11/' PAGENO="0624" 3244 SEC. 502. (a) Section 1798 of title 38, United States Code, is amended- (1) by striking out in subsection (b) (3) "$270" and "$600" and insert- ing in lieu thereof "$292" and "$2,000", respectively; and (2) by amending clause (3) of subsection (d) to read as follows: "(3) shall provide that the loan shall bear interest, on the unpaid bal- ance of the loan, at a rate prescribed by the Administrator, at the time the loan is contracted for which rate shall be comparable to the rate of interest charged students at such time on loans insured by the Commissioner of Education, Department of Health, Education, and Welfare, under part B of title IV of the Higher Education Act of 1965, but in no event shall the rate so prescribed by the Administrator exceed the rate charged students on such insured loans, and shall provide that no interest shall accrue prior to the beginning date of repayment; and". (b) The amendments made by subsection (a) shall be effective with respect to loans made under section 1798 of title 38, United States Code, on and after October 1, 1976. SEC. 503. Section 1774 of title 38, United States Code, is amended- (1) by adding at the end of subsection (a) thereof the following new sentence: "The Administrator may also reimburse such agencies for work performed by their subcontractors where such work has a direct relation- ship to the requirements of chapter 32, 34, 35, or 36 of this title, and has bad the prior approval of the Administrator."; and (2) by amending subsection (b) to read as follows: "(b) The allowance for administrative expenses incurred pursuant to subsec- tion (a) of this section shall be paid in accordance with the following formula: "Total salary cost reimburs- Allowable for administrative expense. able under this section $5,000 or less $600. Over $5,000 but not ex- ceeding $10,000 $1,080. Over $10,000 but not ex- ceeding $35,000 $1,080 for the first $10,000 plus $1,000 for each additional $5,000 or fraction thereof. Over $35,000 but not ex- ceeding $40,000 $6,535. Over $40,000 but not ex- ceeding $75,000 $6,535 for the first $40,000 plus $865 for each additional $5,000 or fraction thereof. Over $75,000 but not ex- ceeding $80,000 $12,960. Over $80,000 $12,960 for the first $80,000 plus $755 for each additional $5,000 or fraction thereof.". SEC. 504. Section 1775 of title 38, United States Code, is amended- (1) by striking out the period at the end of subsection (a) and inserting in lieu thereof "which must be certified as true and correct in content and policy by an authorized representative of the school. The catalog or bulletin must specifically state its progress requirements for graduation and must include as a minimum the information required by sections 1776(b) (6) and (7) of this title."; and (2) by inserting before the period in the first sentence of subsection (b) the following: "and must include as a minimum (except for attendance) the requirements set forth in section 1776(c) (7) of this title". SEC. 505. Section1780(a) of title 38, United States Code, is amended- (1) by striking out at the end of clause (1) "or"; (2) by striking out the period at the end of clause (2) and inserting In lieu thereof a semicolon; and (3) by inserting immediately after clause (2) the following new clauses: "(3) to any eligible veteran or person for auditing a course; "(4) to any eligible veteran or person for a course for which the grade assigned is not used in computing the requirements for graduation including a course; from which the student withdraws unless the Administrator finds there are mitigating circumstances; or "(5) to any eligible veteran or person for pursuit of a program of educa- tion exclusively by correspondence as authorized under section 1786 of this title or for the pursuit of a correspondence portion of a combination corre- i4i PAGENO="0625" 3245 spondence-residence course leading to a vocational objective where the normal period of time required to complete such correspondence course or portion is less than 6 months. A certification as to the normal period of time required to complete the course must be made to the Administrator by the educational institution.". SEC. 506. The last sentence of section 1780(a) of title 38, United States Code, is amended to read as follows: "Notwithstanding the foregoing, the Administra- tor may, subject to such regulations as the Administrator shall prescribe, continue to pay allowances to eligible veterans and eligible persons enrolled in courses set forth in clause (1) or (2) of this subsection- "(A) during periods when the schools are temporarily closed under an established policy based upon an Executive order of the President or due to an emergency situation, and such periods shall not be counted as absences for the purposes of clause (2); "(B) during periods between consecutive school terms where such veterans or persons transfer from one approved educational institution to another ap- proved educational institution for the purpose of enrolling in and pursuing a similar course at the second institution if the period between such con- secutive terms does not exceed 30 days, but such periods shall be counted as absences for the purposes of clause (2) ; or "(C) during periods between a semester, term, or quarter where the edu- cational institution certifies the enrollment of the eligible veteran or eligible person on an individual semester, term, or quarter basis if the interval be- tween such periods does not exceed 1 full calendar month, but such periods shall be counted as absences for the purposes of clause (2).". SEC. 507. Section 1784(a) of title 38, United States Code, is amended by adding at the end thereof the following: "The date of interruption or termination will be the last date of pursuit or, in the case of correspondence training, the last date a lesson was serviced by the school.". SEC. 508. Section 1784(b) of title 38, United States Code, is amended by striking out "$3" and "$4" and inserting in lieu thereof "$5" and "$6", respectively. SEC. 509. (a) Section 1788(a) of title 38, United States Code, is amended- (1) by striking out the semicolon at the end of clause 1 and inserting in lieu thereof a comma and the following: "but if such course is approved pursuant to section 1775 of this title, then 22 hours per week of attendance, with no more than 2½ hours of rest period per week allowed and excluding supervised study, sl~all be considered full time;"; and (2) by striking out the semicolon at the end of clause 2 and inserting in lieu thereof a comma and the following: "but if such course is approved pur- suant to section 1775 of this title, then 18 hours per week net of instruction (excluding supervised study), which may include customary intervals not to exceed ten minutes between hours of instruction, shall be considered full time ;". (b) Section 1789 of title 38, United States Code, is amended by adding at the end thereof a new subsection (c) as follows: "(c) Notwithstanding the provisions of subsection (b) (1), (2), (3), or (4) of' this section, the provisions of subsection (a) shall apply to any course offered by a branch or extension of- "(1) a public or other tax-supported institution where the branch or ex- tension is located outside of ~he area of the taxing jurisdiction providing support to such institution; or "(2) a proprietary profit or proprietary nonprofit educational institution where the branch or extension is located beyond the normal commuting dis- tance of such institution.". SEC. 510. Section 1792 of title 38, United States Code, is amended- (1) by inserting in the last sentence "on a regular basis" after "shall"; and (2) by striking out in the last sentence "from time-to-time" and inserting in lieu thereof "(which shall meet at least semiannually) SEC. 511. Section 1790(c) of title 38, United States Code, is amended to read as follows: "(c) Notwithstanding any other provision of law, the records and accounts of educational institutions pertaining to eligible veterans or eligible persons who received educational assistance under this chapter or chapter 31, 32, 34, or 35 of this title, as well as the records of other students which the Administrator deter- mines necessary to ascertain institutional compliance with the requirements of j15 78-226 0 - 77 - 40 (Pt. 4) PAGENO="0626" 3246 such chapters, shall be available for examination by duly authorized representa- tives of the Government.". SEC. 512. Subchapter II of chapter 36, United States Code, is amended- (1) by striking out section 1793 and inserting in lieu thereof the following: "~ 1973. Compliance surveys "The Administrator shall conduct an annual compliance survey of each institu- tion offering one or more courses approved for the enrollment of eligible veterans or persons where at least 300 veterans or persons are enrolled under provisions of this title or where the course does not lead to a standard college degree. Such compliance survey shall assure that the institution and approved courses are in compliance with all applicable provisions of chapters 31, 34, 35, and 36 of this title. The Administrator shall assign at least one education compliance specialist to work on compliance surveys in any year for each 40 compliance surveys re- quired to be made under this section."; (2) by repealing section 1795; (3) by striking out in the table of sections at the beginning of chapter 36 of such title "1793. InstitutIons listed by Attorney General." and inserting in lieu thereof "1793. Compliance surveys."; and (4) by striking out in such table of sections "1795. Limitation on period of assistance under two or more programs.". SEC. 513. Section 1796 of title 38, United States Code, is amended- (1) by redesignating subsections (b) and (c) as (c) and (d), respectively; and (2) by inserting after subsection (a) a new subsection (b) as follows: "(b) To ensure compliance with this section, any institution offering courses approved for the enrollment of eligible persons or veterans shall maintain a complete record of all advertising, sales, or enrollment materials (and copies thereof) utilized by or on behalf of the institution during the preceding 12-month period. Such record shall be available for inspection by the State approving agency or the Administrator. Such materials shall include but are not limited to any direct mail pieces, brochures, printed literature used by sales persons, films, video tapes, and audio tapes disseminated through broadcast media, material disseminated throngh print media, tear sheets, leaflets, handbills, fliers, and any sales or recruitment manuals used to instruct sales personnel, agents, or representatives of such institution.". SEC. 514. Chapter 36 of title 38, United States Code, is amended- (1) by striking out in section 1771 (a) "his" and inserting in lieu thereof "such"; (2) by striking out in section 1775 (a) "he" and inserting in lieu thereof "the Commissioner"; (3) by striking out in subsections (b) and (c) of section 1777. "he", "him", "his" each time `they appear and inserting in lieu thereof "the veteran or person", "the veteran or person", and "such veteran's or person's", respectively; (4) by striking out in section 1779(b) "his" and inserting in lieu thereof "the Administrator's"; (5) by striking out in subsections (a) and (b) of section 1780 "his", "wife or widow", and "wife's or widow's" each time they appear and insert- ing in lieu thereof "such veteran's or person's", "spouse or surviving spouse", and "spouse's or surviving spouse's", respectively; (6) by striking out in subsections (c) and (d) of section 1780 "his" and "he" each time they appear and inserting in lieu thereof "such veteran's or person's" and "the veteran or person", respectively; (7) by striking out in the first sentence of section 1780(d) (2) "Subject" and inserting in lieu thereof "Notwithstanding any other provision of law, but subject"; (8) by striking out ~n the first sentence of section 1780(e) "Except" and inserting in lieu tb'ereof "Notwithstanding any other provision of law, and except"; 16 PAGENO="0627" 3247 (9) by striking out in section 1780(f) "him" and inserting in lieu thereof "such veteran or person"; (10) by striking out in section 1780(h) "he" the first time it appears and inserting in lieu thereof "the Administrator" and by striking out "he" the second time it appears and inserting in lieu thereof "the veteran or person"; (11) by striking out in section 1781 "him" and inserting in lieu thereof "such person"; (12) by striking out in section 1783(a) "his" and inserting in lieu thereof "such officer's or employee's"; (13) by striking out in section 1783(b) "he" the first time it appears and inserting in lieu thereof "such person" and by striking out "he" the second time it appears and inserting in lieu thereof "the Administrator"; (14) by striking out in section 1783(d) "he" and inserting in lieu thereof "the Administrator"; (15) by striking out in subsections (a) and (b) of section 1784 "him" and inserting in lieu thereof "the Administrator"; (16) by striking out in subsections (a), (b), and (c) of section 1786 "wife and widow" and "his" each time they appear and inserting in lieu thereof "spouse or surviving spouse" and "such veteran's or spouse's", respectively; (17) by striking out in subsections (a), (b), and (d) of section 1790 "he" each time it appears and inserting in lieu thereof "the Administrator"; (18) by striking out in subsections (a), (b), and (c) of section 1791 "his" and "he" each time they appear and inserting in lieu thereof "the veteran's or person's" and "the Administrator", respectively; (19) by striking out in section 1794 "his" and inserting in lieu thereof "the Administrator's"; (20) by striking out in section 1796(c) (as redesignated by section 513(1) of this Act) "his" and inserting in lieu thereof "the Administrator's"; (21) by striking out in section 1798(b) (1) "he" and inserting in lieu thereof "the veteran or person" and by striking out in section 1798(e) (1) "he" and inserting in lieu thereof "the Administrator"; and (22) by striking out in section 1799(d) "his" and inserting in lieu thereof "the Administrator's". TITLE VI-VETERANS' EMPLOYMENT ASSISTANCE PROVISIONS SEC. 601. (a) Section 2002 of title 38, United States Code, Is amended by in- serting "by an Assistant Secretary of Labor for Veterans' Employment" after "promulgated and administered". (b) Chapter 41 of title 38, United States Code, is amended- (1) by adding after section 2002 a new section as follows: "~ 2002A. Veterans' Employment Service; Assistant Secretary of Labor for Veterans' Employment "There is established within the Department of Labor a separate agency to be known as the Veterans' Employment Service. Such agency shall be headed by an Assistant Secretary of Labor for Veterans' Employment who shall be responsible, subject to the supervision and control of the Secretary of Labor, for carrying out the policies and purposes of this chapter, chapter 42, and chapter 43 of this title and for policy formulation and administrative implementation for all Department of Labor employment, unemployment, and manpower programs to the extent they affect veterans."; and (2) by amending the table of sections at the beginning of chapter 41 of such title by inserting below "2002. Purpose." the following: "2002A. Veterans' Employment Service; Assistant Secretary of Labor for Veterans' Employment.". (c) Section 2 of the Act of April 17, 1946, as amended (29 U.S.C. 553), is amended- (1) by striking out "five" in the first sentence of such section and inserting in lieu thereof "six"; and (2) by adding at the end thereof a new sentence as follows: "One of such Assistant Secretaries of Labor shall be an Assistant Secretary of Labor for Veterans' Employment.". 17 PAGENO="0628" 3248 (d) Paragraph (20) of section 5315 of title 5, United States Code, is amended by striking out "(5)" and inserting in lieu thereof "(6)". SEC. 602. Section 2003 of title 38, United States Code, is amended- (1) by inserting in the fourth sentence "or by prime sponsors under the Comprehensive Employment and Training Act" after "programs adminis- tered by the Secretary"; (2) by striking out "and" at the end of clause (5); and (3) by redesignating clause (6) as clause (7) and inserting new clause (6) as follows: "(6) promote the participation of veterans in Comprehensive Employment and Training Act programs and monitor the implementation and operation of Comprehensive Employment and Training Act programs to assure that eligible veterans receive special consideration when required; and". SEC. 603. Section 2006(a) of title 38, United States Code, is amended by in- serting in the last sentence "each" after "shall". SEC. 604. Section 2007 of title 38, United States Code, is amended- (1) by striking out in subsection (a) (1) "his" and inserting in lieu thereof "such veteran's and eligible person's"; (2) by inserting in the second sentence of subsection (C) "and public service employment" after "occupational training"; and (3) by striking out in the last sentence of subsection (c) "or 2006" and inserting in lieu thereof ", 2006, or 2007(a)". &C. 605. Section 2012 of title 38, United States Code, is amended by adding at the end thereof a new subsection (c) as follows: "(c) The Secretary shall include as part of the annual 1~eport required by sec- tion 2007(c) of this title the number of complaints filed pursuant to subsection (b) of this section, the actions taken thereon and the resolutions thereof. Such report shall also Include the number of contractors listing suitable employment openings, the nature, types, and number of positions listed and the number of veterans receiving priority pursuant to subsection (a) (2) of this section.". SEC. 606. Chapter 41 of title 38, United States Code, is amended- (1) by striking out in section 2003 "he" and "his" and inserting in lieu thereof "the Secretary" and "such representative's", respectively; (2) by striking ~ut in section 2004 "his" and inserting in lieu thereof "such representative's" and by inserting "or eligible persons" after "eligible vet- erans"; (3) by striking out in section 2005 "he" and inserting in lieu thereof "the Secretary"; and (4) by striking out in section 2008 "his" and "him" and Inserting In lieu thereof "the Secretary's" and "the Administrator", respectively. SEC. 607. Chapter 42 of title 38, United States Code, is amended- (1) by striking out in section 2011(2) "his" and inserting in lieu thereof "the person's"; and (2) by striking out in the first sentence of section 2012(b) "his" and inserting in lieu thereof "the contractor's". SEC. 608. Chapter 43 of title 38, United States Code, is amended- (1) by striking out in section 2021(a) (2) (B) "his" each time it appears and inserting in lieu thereof "the employer's"; (2) by striking out in section 2021(b) (2) "his" and "he" and inserting in lieu thereof "the person's" and "the person", respectively; and (3) by striking out in the sixth sentence of section 2024(d) "his" each time it appears and inserting in lieu thereof "such employer's". TITLE Vu-MISCELLANEOUS AND EFFECTIVE DATE SEC. 701. Section 3101 (a) of title 38, United States Code, is amended by adding at the end thereof the following: "For the purposes of this subsection, In any case where a payee of an educational assistance allowance has designated the address of an attorney-in-f act as the payee's address for the purpose of reoclvin~r his or her benefit check and has also executed a power of attorney giving the attorney- in-fact authority to negotiate such benefit check, such action shall be deemed to be an assignment and is prohibited.". SEC. 702. Except as otherwise provided herein, the provisions of this Act shall become effective on October 1, 1976. 18 PAGENO="0629" 3249 Amend the title so as to read: A bill to amend title 38, United States Code, to increase vocational rehabilita- tion subsistence allowances, educational and training assistance allowances, and speeial allowances paid to eligible veterans and persons under chapters 31, 34, and 35; to extend the basic educational assistance eligibility for veterans and for certain dependents from thirty-six to forty-five months; to improve and expand the special programs for educationally disadvantaged veterans and servicemen under chapter 34; to improve and expand the education loan program for vet- erans and persons eligible for benefits under chapter 34 or 35; to create a new chapter 32 (Post-Vietnam Era Veterans' Readjustment Assistance program) for those entering military service on or after January 1, 1977; to make other im- provements in the educational assistance program; to clarify, codify, and strengthen the administration of educational benefits to prevent or reduce abuse; to promote the employment of veterans by improving and expanding the provi- sions governing the operation of the Veterans' Employment Service; and for other purposes. INTRODUCTION The Subcommittee on Readjustment, Education, and Employment, chaired by Senator Vance Hartke, conducted hearings on October 1 and 2, and on October 22, 1975, concerning education and employment assistance benefits and readjustment problems of veterans. In addition, the full Committee received legislative recommendations of most vet- erans' organizations in testimony on March 2, ~, and 24, 1976, which recommendations covered education and employment assistance. The hearings reviewed the adequacy of readjustment assistance, particu- larly with regard to educational benefits and employment problems of Vietnam era veterans. The hearings also examined pending legislation which included Chairman Hartke's bill S. 969, 5. 760, and H.R. 9576 (the House-passed education legislation) as well as other measures pending before the subcommittee. At the hearings on October 1 and 2, 1976, which generally were concerned with the adequacy of readjustment assistance benefits a~nd the effect of termination of 01 bill benefits for those now entering mili- tary service, the Committee received testimony from Rufus Wilson, Chief Benefits Director of the Veterans' Administration, and Donald U. Brotzman, Assistant Secretary of the Army for Manpower and Reserve Affairs. Veterans' organizations testifying included The American Legion, Veterans of Foreign Wars, Disabled American Vet- erans, the National Association of Concerned Veterans, Paralyzed Veterans of America, and the Non-Commissioned Officers Association of the United States of America. Testimony was also received from representatives of the American Association of Community and Junior Colleges, the American Association of State Colleges and Universities and the Division of Programs to Advance Veterans' Education of the Pennsylvania Department of Education. Additional veterans' or- ganizations presenting testimony in the March 1976 hearings included representatives of AMVETS, and the Blinded Veterans Association. The hearing on October 22. 1975, was principally concerned with the employment problems of disabled and Vietnam era veterans, and re- ceived testimony from representatives of the Department of Labor, including the Assistant Secretary of Labor for Employment and Training Standards, the Assistant Secretary of Labor for Employ- ment Standards Administration, and the Director of the Veterans' 19 * PAGENO="0630" 3250 Employment Service. Representatives of several veterans' organiza- tions and the past executive secretary of the United Veterans' Com- mittee of Colorado testified. Following these hearings, an amendment in the nature of a substi- tute to S. 969 known as the Veterans' Education and Employment Assistance Act of 1976 (amendment No. 2005), was introduced on July 1, 1976, by Chairman Hartke and by Senator Stafford, ranking minority member of the Subcommittee on Readjustment, Education, and Employment. Written views of the administration and of other interested parties were extensively solicited by the Committee. The Comrtiittee received the views of the administration from the Veter- ans' Administration, the Department of Labor, the Department of De- fense, the Civil Service Commission, and the Office of Management and Budget. Veterans' organizations submitting written testimony, with respect to the. Veterans' Education and Employment Assistance Act of 1976, included The American Legion, the Veterans of Foreign Wars, Disabled American Veterans, AMVETS, Paralyzed Veterans of America, Non-Commissioned Officers Association, and the National Association of Concerned Veterans. Other written views concerning 5. 969, as amended, were received from a number of educational associations including the American Council on Education on behalf of the following organizations~: American Association of Community Colleges, American Association of State Colleges and Universities, American Council on Education, Association of American Universities, Association of Jesuit Colleges and Universities, National Association of Independent Colleges and Universities, National Association of State Universities and Land Grant Colleges, and National Catholic Education Association-Col- lege and University Department. Additionally the chancellor of the University of Maryland, representatives of the State University of New York, and the legislative representative of the States Approving Agencies Association all submitted comments. In reaching its decision, the Committee also gave careful considera- tion to various letters, documents, reports, and other materials sub- mitted to it. Material of general interest to the Committee included the Veterans' Administration Educat.ion, Tuition Assistance Study (November 1975) mandated by section 105 of Public Law 93-508 and two other VA studies entitled "Completion Rates for Education and Training Under the Vietnam Era GI Bill" and "Training by Cor- respondence Under the GI Bill (An Indepth Analysis)" both sub- mitted on August 10, 1976. Also of general interest to the Committee was a report by the General Accounting Office, completed at the Com- mittee's request, "Veterans' Responses to GAO Questionnaires on the Operation and Effect of VA Educational Assistance Programs" (Au- gust 11, 1976). Finally, the report of the Subcommittee on Education, Consumer Protection of the Federal Interagency Committee on Edu- * cation entitled "Toward a Federal Strategy for Protection of Con- sumer Education" (July 1976) and the report of the National Advisory Council on Education Professiops Development entitled "Gatekeepers in Education: A Report on Institutional Training" (April 1975) of interest and value to the Committee. 20 PAGENO="0631" `~~%5 1 As to GI bill overpayments and program abuse, the Committee carefully examined the following reports and documents: The Gen- eral Accounting Office report "Educational Assistance Overpayments, A Billion Dollar Problem-A Look at the Causes, Solutions, and Col- lection Efforts" çMarch 19, 1976) ,the House Appropriation Committee staff report on `Overpayments of Readjustment Benefits of the Vet- erans' Administration" (March 5, 1976), and an investigative series on postsecondary education appearing in the Chicago Tribune be- tween June 18 and 25, 1975. Of particular help in this area were the published hearings of the Subcommittee on Education and Training of the House of Representatives Committee on Veterans' Affairs held on April 8,13; May 6,29; and June 2, 1976. On the question of termination of the GI bill for those now entering the services and consideration of possible alterhatives, the Committee considered numerous documents including: "Defense Manpower: The Keystone of National Security," a report to the President and the Congress by the Defense Manpower Commission, (April 1976) ; "An Assessment of all Volunteer Force Recruits," General Accounting Office (February 27, 1976) ; "Citizen Force on Career Force Impli- cations for Ideology in the All-Volunteer Army," Jerald Bachman and John Blair (November 1975); "Educational Benefits and the All-Volunteer Force," Charles Moskos and Morris Janowitz, (Spring 1976); "All Volunteer Armed Forces Progress, Problems and Pros- pects," Martin Binkin and John Johnston (June 1, 1973); "Prob- lems Resulting From Mnn.agement Practices in Recruiting, Training, and Using Non-High School Graduates and Category IV Personnel," General Accounting Office (January 12, 1976); and certain hearings conducted by the Senate Armed Services Committee in regard to Manpower, February-March 1976. Finally, while considering veteran unemployment problems, the Committee examined a number of documents including a report by the General Accounting Office `on "Veterans' Administration On-Job Training Programs" (July 9, 1975), Department of Labor special re- port on "Implementation of Outreach and Other Veterans' Services" (May 26, 1975), Civil Service Commission report on "Employment of Disabled and Vietnam Era Veterans in the Federal Government" (November 1975), Veterans' Administration report on "Implementa- tion of Outreach" (May 22, 1975), "Interagency Jobs for Veterans, Advisory Committee" report for fiscal year 1975 and a Department of Labor study of "Disabled Veterans of the Vietnam Era: Employment Problems in Programs" (January 1975). Following the Committee hearings, and review of written comments and other documents submitted to it, the Committee met in open execu- tive session oii September 1, 1976, to consider S. 969. After the addi- tion of several amendments, they unanimously approved and ordered favorably reported 5. 969 with an amendment in the nature of a substitute. . SUMMARY OF PROVISIONS OF S. 969, AS AMENDED Basic Purpose The Veterans' Education and Employment Assistance Act of 1976 is intended to expand and to improve further the current GI bill pro- gram. The act represen~ ~he ~omwdtte%e's continued oversight efforts PAGENO="0632" 3252 of education and employment assistance programs. Previous legisla- tion resulting from such oversight includes Public Law 91-219, Public Law 92-540 and the Vietnam Era Veterans' Rea4justment Assistance Act of 1974 (Public Law 93-508). As reported, S. 969 provides an 8-percent increase in the vocational rehabilitation subsistence allowance paid to disabled veterans training under chapter 31. Similar 8-percent increases in the educational train- ing assistance allowances are authorized for veterans training under chapter 34 and for survivors and dependents training under chapter 35. Maximum entitlement to educational benefits for all eligible veterans and dependents is extended from 36 to 45 months. The Veterans' Ad- ministration direct education loan program and special programs for educationally disadvantaged veterans and servicemen are improved and expanded. Eligibility for current GI educational benefits are ter- minated for those entering the Armed Forces after December 31, 1976. A new chapter 32 contributory vesting educational assistance program known as the Post-Vietnam Era Veterans' Readjustment Assistance Program is established for those entering the Armed Forces on or after ,January 1, 1977. Provisions are included which clarify, codify, and strengthen administrative provisions of the VA educa- tional assistance program. These provisions are designed to prevent or reduce abuses. Finally, provisions are included which strengthen current employment assistance provisions for veterans. The Act would elevate the Director of Veterans' Employment Service within the Department of Labor to assistant secretary. Summary of Provisions S. 969, as amended, the Veterans Education and Employment As- sistance Act of 1976, contains seven titles whose provisions are more fully described hereafter. Title I-Chapter 31, Disabled Veterans Rehabilitation Rate and Pro- gram Adjustments-Of S. 969, as amended: (1) Increases by 8 percent the subsistence allowance paid dis- abled veterans pursuing a course of vocational rehabilitation under chapter 31 of title 38, United States Code; (2) Eliminates the current termination date for use by seri- ously disabled veterans of chapter 31 benefits when it is deter- mined that such veterans are still in need of vocational rehabilita- tion; and (3) Permits chapter 31 trainees to be trained in Federal agency facilities on the same basis as trainees under the Rehabilitation Act of 1973, thus affording disabled veterans increased oppor- tunities for Federal employment. Title Il-Veterans' Education Rate Program Adjustments-of S. 969, as amended: (1) Increases by 8 percent the educational assistance allowance paid eligible veterans .pursuing a program of education (includ- ing farm cooperative, elementary and secondary education and preparatory educational assistance) under chapter 34 of title 38, United States Code; (2) Increases by 8 percent the individualized tutorial assistance allowance authorized for eligible veterans with deficiencies in 22 PAGENO="0633" 3253 subjects required as part of an approved program of educ1ation; (3) Extends the tutorial assistance program in certain cases to veterans enrolled in institutional or technical courses not lead- ing to a standard college degree; (4) Authorizes full entitlement for educational assistance benefits under chapter 34 for service of less than 18 months to any eligible veteran medically discharged because of a service-con- nected disability; (5) Removes the current restriction to undergraduate use of the 9 months of additional benefit entitlement granted in 1974 thus allowing a maximum of 45 months of eligibility for an ap- proved program of education (including graduate work); (6) Extends the 10-year delimiting period for use of VA bene- fits for such periods of time that a veteran is prevented from completing his or her program of education because of a physical or mental disability not the result of the veterans misconduct; (7) Codifies existing regulations which define the terms "in- stitution of higher learning" and "standard college degree"; (8) Directs the Administrator to conduct a study to determine the effectiveness of vocational objective courses approved for enrollment of veterans with particular emphasis as to whether there is full compliance with the provisions of section 1673 (a) (2) (9) Codifies existing regulations which limit enrollment of veterans in any independent study program other than those leading to a standard college degree and provides that benefits for a course of study exclusively by independent study shall be computed on a less than half time basis; (10) Extends to all programs of education the requirement that no more than 85 percent of the students enrolled in certain approved courses be in receipt of VA benefits or other Federal grants. (11) Clarifies the definition of "unsatisfactory progress" to include those situations where a veteran is not progressing at a rate which will allow the veteran to graduate within the normal period of time for completion of studies (unless the Administra- tor finds that there are mitigating circumstances); (12) Amends the veteran-student services program to permit completion of a work-study agreement even if the veteran ceases to be a full-time student; and (13) Reciuires the VA to rn~il~-e available cnrnnrehensiye educa- tional and vocational counseling to any eligible veteran who requests it. Title "-Chapter 3.~. Survivor,~ and Dependent$ Rducationcd As- sistance Rate and Pro gramS Adlustments-o/ S. 969, as am~ended: (1) Increases by 8 percent the educational assistance allowance paid survivors of veterans who died of service-connected causes, and dependents of seriously disabled veterans; (2) Extends maximum entitlement to benefits from 36 to 45 months for all persons training under chapter 35; (3) Liberalizes the period of eligibility for use by eligible children of educational assistance benefits under chapter 35; 23 PAGENO="0634" 3254 (4) Codifies existing regulations which define the terms "in- stitution of higher learning" and "standard college degree"; (5) Codifies existing regulations which limit enrollment of eligible persons in any "independent study program" other than those leading to a standard college degree and provides that bene- fits for a course of study which is exclusively by independent study shall be computed on a less than half time basis; and (6) Further defines "unsatisfactory progress" to include those situations where an eligible person is not progressing at a rate which will allow the eligible person to graduate within the nor- mal time for completion of the program as certified to the Vet- erans' Administration (unless the Administrator finds that there are mitigating circumstances). Title IV-Post-Viet'nam Era Vetera~ Read justment Assistant-of S. 969, as amended: (1) Establishes December 31, 1976, as the terminating date for establishing eligibility for veterans' education and training bene- fits under chapter 34 of title 38, United States Code; (2) Establishes for those men and women entering the Armed Forces on or after January 1, 1977, a new chapter 32 educational matching assistance program known as Post-Vietnam Era Vet- erans' Readjustment Assistance; and (3) Provides that in the event involuntary induction under the Selective Service Act is reimposed by law that those entering military service after the effective date of such a change in the law shall be eligible for chapter 34 educational benefits. Title V-Chapter 36, Education Loan and Program Administration Amendments-of S. 969, as amended: (1) Increases by 8 percent the monthly training assistance allowance paid to eligible veterans or persons pursuing a full program of apprenticeship or other on-job training and provides similar increases for those pursuing a program of education by correspondence; (2) Increases from $600 to $2,000 the maximum annual VA direct education loan available for eligible veterans, survivors, and dependents; (3) Amends the VA direct education loan program to provide that interest charges on such loans shall be comparable to, but shall not exceed those charged students under other federally insured educational loan programs; (4) Provides that the school catalogs submitted by institutions to State approving agencies contain the schools' progress require- ments for graduation; (5) Codifies existing regulations prohibiting payments for the auditing of courses and further directs that absent mitigating circumstances no payment will be authorized for any course for which the grade assigned is not used in computing the require- ments for graduation; (6) Permits continued VA payments for intervals between school terms and provides that when a veteran or eligible person transfers from one institution to another payments are permitted 241 PAGENO="0635" 3255 providing that in either event such periods do not exceed 30 days; (7) Increases by 8 percent the allowance paid for adminis- trative expenses incurred by State approving agencies in super- vising approved educational institutions and further authorizes subcontracting by su.ch State agencies; (8) Codifies existing regulations which provide that the date of interruption or termination in a program of education shall be the last date the veteran or eligible person pursued such course; (9) Increases by $2 the reporting fee paid to institutions for each veteran or other eligible person enrolled therein; (10) Reduces the required number of clock hours in certain vocational objective courses necessary to qualify as a full-time course; (11) Extends the requirment of 2 years of operation to certain branches or extensions of institutions prior to VA approval for enrollment of veterans. (12) Provides the Administrator shall not approve the enroll- ment of any eligible veteran or person in any correspondence course leading to a vocational objective which is normally com- pleted in less than 6 months; (13) Strengthens section 1796 which directs the Administrator not to approve the enrollment of veterans in any course offered by an institution utilizing the erroneous, deceptive or misleading sales or enrollment practices by requiring institutions to maintain complete records and copies of all advertising and sales materials utilized during the preceding 12-month period; (14) Clarifies and strengthens provisions permitting VA in- spection of student records to assure institutional compliance with the requirements of title 38; (15) Strengthens and improves the education advisory com- mittee to the Veterans' Administration; (16) Repeals the current 48-month limitation for benefit entitle- ment to any person eligible and training under more than one VA educational assistance Drogram; and (17) Requires annual VA compliance surveys of institutions which enroll eligible veterans. Title VI-Veterans' Employment Assi~tanee P~ovi$ion.~-_--of S. 969, a~ amended: (1) Provides that the Veterans' Employment Service within the Department of Labor shall be headed by an Assistant Sec- retary of Labor for Veterans' Employment: and (2) Expands and strengthens the administrative controls to assure that, eligible veterans receive satisfactory employment assistance. Title VIJ-M~cel7 n~ov~ and Effective Date-of S. 969, ae amended: (1) Provides that, .except as otherwise specified, all provisions shall become effective on October 1, 1976; and (2) Clarifies and strengthens provisions prohibiting the as- signment of VA benefits. 25 PAGENO="0636" 3256 In addition to the foregoing, there are a number of technical amend- ment~s to chapters 31, 34, 35, 36, 41, 42, and 43 of title 38, United States Code, including the removal of unnecessary or unwarranted gender references. A general discussion of the more major provisions of the reported bill is set forth below. Additional background material and expressions of Committee views are set forth under the section-by-section analysis, infra. BACKGROUND AND DIscussIoN Veterans' A dm~inistration Educationa~ Assistance Pro grai its Educational assistance to facilitate a veteran's readjustment to civilian life has been part of American life for 32 years. Over 16.3 million veterans, almost 8 percent of the entire population of the United States, have received educational assistance under the GI bill since 1944. This includes 7.8 million under the World War II GI bill, nearly 2.4 million under the Korean conflict GI bill and more than 6.1 million trainees under the current G~[ bill. The Committee believes the impact of the GI bill on the American society cannot be underestimated. For each dollar snent in educational benefits (which for the three GI bills now exceeds $40 billion), the Federal Government has received from $3 to $6 in additional tax revenue from veterans whose education has given them increased earning capacity. As the Bradley Commission concluded in 1956: By any standard, the readjustment program * * * was one of the greatest efforts in human history to assure the well-being of millions of persons. * * * The Commission believes there is little question that the veterans' education program has been a great benefit to millions of veterans and to the Nation. The veterans' education program was a major contribution to the n~tional welfare, and the country would be weaker educationally, economically, and in terms of na- tional defense, if educators, veterans' organizations, the President, and the Congress had not seen this new and momentous educational enterprise. The Committee believes it should also be noted that in fiscal year 1976, the Veterans' Administration expended almost $5.7 billion for postsecondary student educational assistance, an amount which rep- resents 53 percent of all such Federal expenditures. Under the current system of educational benefits, enacted as Public Law 89-358 effective June 1, 1966 and subsequently amended in 1967, 1970, 1972, nnd 1974 over 6.2 million veterans and 223,000 sur- vivors and dependents have taken advantage of their GI bill benefits. The current program provides educational benefits, for a myriad of education and training courses for both veterans and wives, widows, and war orphans. The following tables show the number of veterans and dependents who .have received nearly $20 billion in educational benefits during the past 10 years under the current program through fiscal year 1975, by type of program: 26 PAGENO="0637" 3257 TABLE L-VETERAN TRAINEES UNDER THE CURRENT GI BILL CUMUL'ATIVE THROUGH FISCAL YEAR 1975 BY TYPE OF TRAINING Cumulative through June 1975 During fiscal year Under- Training programs 1975 Total Graduate graduate Nondegree Total all types of training 2, 691, 566 5, 785, 548 1,112, 527 4, 325, 621 347, 500 COLLEGE LEVEL Total 1,695,575 3,095,862 499,910 2,511,028 34,424 Academic degrees-field not specified- total 1,125, 373 1, 802, 574 783, 798 1, 619, 376 Associate in arts 339, 186 524, 018 524, 018 Associate in science 46, 379 71, 734 71, 734 Associate degree, n.e.c ` 270, 018 366, 505 366, 505 Bachelor of arts 102, 968 181, 103 181, 103 Bachelor of science 69, 225 124, 972 124, 972 Bachelor's degree, n.e.c 202, 314 351, 044 351, 044 Master of arts 24, 846 45, 400 45,400 Master of science 10, 862 22, 592 22, 592 Master's degree, n.e.c 47, 725 87, 625 87, 625 Doctor of philosophy 10, 031 23, 326 23, 326 Doctor's degree, n.e.c 1, 713 4, 034 4, 034 Post Doctoral, n.e.c 106 221 221 Business and commerce 168, 891 384, 478 84, 109 300, 369 Education 45, 580 131, 412 67, 880 63, 532 Engineering 26,381 80,497 12,125 68,372 English and Journalism 3, 304 11, 384 3, 965 7, 419 Fine and applied arts 11,394 30,102 5,811 24,291 Foreign languages 806 3, 142 1, 602 1, 540 Law 16, 165 41, 280 34, 025 7, 255 Liberal arts (major not specified) 26, 880 58, 571 1, 754 56, 817 Life sciences-total 37, 361 98, 886 53, 429 45, 457 Agricultural sciences 5, 122 14, 797 2, 821 11, 976 Biological sciences 6,869 17, 062 4, 958 12, 104 Medical and health sciences 25, 370 67, 027 45, 650 337 Mathematics 1, 967 7, 535 2, 323 5, 212 Physical sciences 4, 925 15, 013 5, 682 9, 331 Social sciences 26, 018 76, 974 31, 442 45, 532 Theology 5, 191 12,764 5,420 7, 344 Technical courses-total 164, 157 284, 165 199, 241 84, 924 Business and commerce 42, 494 69, 174 50, 922 18, 252 Engineering and related 3, 309 6, 837 6, 136 701 Medical and related 5, 133 11, 358 6, 178 5, 180 Other technician courses 113, 221 196, 796 136, 005 60,791 All other academic fields 31, 182 57, 085 7, 145 49, 940 Vocational During Total or technical Other fiscal year other post-high vocational 1975 schools school or technical High school SCHOOLS OTHER THAN COLLEGE Total 804, 368 2, 228, 021 377, 324 1, 588, 121 262, 576 Arts 26,547 115,116 28,426 85,690 Business 61, 430 326, 143 95, 757 236, 386 Services 37,379 128,362 26,910 101,452 Technical courses-total 50, 864 204, 619 58, 397 146, 222 Electronic 34, 675 139, 388 41, 122 98, 266 Engineering 5, 120 32, 664 5, 191 27, 473 Legal 1, 822 8, 785 3, 488 5, 297 Medical and related 4, 125 10, 086 4, 635 5, 451 Other technical, n.e.c 5, 122 13, 696 3, 961 9, 735 Trade and industrial-total 408, 926 984, 358 154, 792 829, 566 Air-conditioning 46,971 128,757 17,392 111,365 Construction 18, 955 40,072 6, 119 33, 953 Electrical and electronic 163, 553 325, 820 53, 547 272, 273 Mechanical 115,785 279,378 37,152 242,226 Metalwork 28, 792 74, 386 18, 234 56, 152 Other trade and industrial 34, 870 135, 945 22,348 113,597 Other institutional j74,~616 *346, 154 13, 042 70, 536 262, 576 Flight training-total 44, 606 - 123,296 123,269 27 PAGENO="0638" 3258 TABLE 1.-VETERAN TRAINEES UNDER THE CURRENT GI BILL CUMULATIVE THROUGH FISCAL YEAR 1975 BY TYPE OF TRAINING-Continued During fiscal year Other 1975 Total job Apprentice os-job MAJOR OCCUPATIONAL OBJECTIVE JOB TRAINING Total 191,623 461,765 235,293 226,472 Technical and managerial 27,981 58,232 3,940 54, 232 ~ Clerical and sales 6, 997 13, 721 1, 386 12,335 Service occupations 23, 900 60, 495 6, 335 54, 160 Farming, fishery, forestry occupations_ -- 1,918 3, 832 348 3,484 Trade and industrial-total 123, 134 305, 855 213, 446 92, 389 Processing occupations 4, 860 11, 832 7, 452 4, 380 Machine trades occupations 42, 424 91, 805 63, 225 28, 580 Benchwork occupations 7, 548 16, 973 9, 750 7, 223 Structural at work occupation 68, 302 185, 245 133, 039 52, 206 Miscellaneous occupations 7, 693 19, 630 9, 818 . 9, 812 1 Not elsewhere classified. TABLE 2.-SURVIVORS AND DEPENDENTS-TRAINEES UNDER THE CURRENT 01 BILL CUMULATIVE THROUGH FISCAL YEAR 1975 BY TYPE OF TRAINING-Continued Individuals trained cumulative through June 1975 All trainees Spouses end During fiscal widows! Training programs year 1975 Total Sons Daughters widowers Total all types of training 87, 952 282,626 127, 170 123, 320 32, 16 ....., .,.. ... .......... ~ .. COLLEGE LEVEL Total 76, 837 228 054 108, 018 99, 098 20, 9:8 Academic degrees, field not specified- total 53,985 119,810 55,685 51,312 12,813 Associate in arts 12, 491 22, 087 9, 034 8, 604 4, 449 Associate in science 1,719 3, 060 1, 185 1, 252 623 Associate degree, n.e.c.' 7, 862 16, 053 7, 324 6, 505 2, 224 Bachelor of arts 3, 688 17, 158 7, 616 3, 182 1,360 Bachelor of science 4, 526 3, 900 4, 714 3, 571 615 Bachelor's degree, n.e.c 16, 701 46, 856 23, 572 20, 911 2, 373 Master of arts 611 1,614 527 736 351 Master of science 105 436 184 158 94 Master's degree, n.e.c 1, 043 3, 132 1, 245 1, 281 606 Doctor of philosophy 136 374 193 88 93 Doctor's degree, n.e.c 23 140 91 24 25 Business and commerce 4,391 20,348 12, 226 6, 778 1, 344 Education 4, 170 22, 841 6, 227 14, 100 2, 514 Engineering - 1, 033 6, 153 5, 905 241 7 English and journalism 333 2, 359 865 1, 374 120 Fine and applied arts 864 4, 379 2, 251 1, 960 168 Foreign languages 72 522 134 357 31 Home economics 200 1, 330 30 1, 210 90 Law 376 1,857 1,539 256 62 Liberal arts (major not specified) 1, 680 11, 769 5, 839 5, 547 383 Life sciences-total 3, 526 13, 490 5, 269 i, 250 971 Agricultural sciences 272 1, 405 1, 244 147 14 Biological sciences 645 2, 703 1, 766 . 895 42 Medical and health sciences 2, 609 9, 382 2, 259 6, 208 915 .~ ~ -.-~..... ..~-.,,.-..-. Mathematics 110 981 6~7 312 12 Physical sciences 225 1, 791 1, 457 225 9 Social scienc~as 1, 512 8, 139 4, 299 3, 338 502 Theology 137650 488 144 18 28 PAGENO="0639" 3259 TABLE 2.-SURVIVORS AND DEPENDENTS-TRAINEES UNDER THE CURRENT GI BILL CUMULATIVE THROUGH FISCAL YEAR 1975 BY TYPE OF TRAINING-Continued Individuals trained cumulative through June 1975 All trainees Arts Business Services Technical courses-total 10,629 53,911 18,616 ._ *.* 2,543 1,573 16,896 2,918 14,788 1,480 24,179 11,116 .* --- 613 357 10,760 3,218 9,136 4,172 592 2,528 2,713 814 3,007 1,575 1,104 Electronic 237 Engineering 45 Medical and related 330 Other technical, n.e.c 202 Trades and industrial-total 2, 649 Construction 155 Dressmaking 665 Electrical and electronic 317 Mechanical 728 Metalwork 330 Other.trade sod-industrial 454 Other institutional 1,333 ON.JOB TRAINING 940 255 1, 236 576 915 244 163 253 12 9 858 225 13 2 215 98 14, 136 10, 321 2, 090 1,725 543 4, 487 1, 969 4, 218 1,423 1, 496 531 1,323 1,863 4, 125 1,366 1, 113 * 5 1, 786 66 67 ~ 133 7 1,378 40 26 24 250 2, 541 749 476 1, 316 Total 486 661 536 _________________________________________________ 43 82 92 121 69 17 35 22 32 14 7 11 50 73 48 10 15 307 411 382 8 21 15 24 23 1 0 Training programs Spouses and During fiscal widcwsf year 1975 Total Sons Daughters widowers -~- -.--~-- .~.----. .--..--- -.....-.. .~... -...~ .~ --.-.~ ---.-.-- ....--. rechnician courses-total 3,371 8,601 3, 937 3, 404 1, 260 Business and commerce 869 1, 786 382 845 559 Engineering and related 38 111 109 1 1 Medical and related 730 2, 203 315 1, 644 244 Other technical courses 1, 734 4, 501 3, 131 914 456 All other academic fields 852 3, 034 1,210 1,190 634 SCHOOLS OTHER THAN COLLEGE LEVEL ~ Technical and managerial Clerical and sales Service occupations Trade and industrial occupations Miscellaneous occupations I Not elsewhere classified.- - Individuals receiving educational assistance allowances may attend approved courses at colleges, universities, business and technica] schools, high schools and, in some cases, even schooling below the high school level. Assistance may also be provided for on-jOb training, farm training, flight training, and correspondence courses. Some 56 percent (3,376,457) of the post-Korean and Vietnam era trainees who have used the current GI bill through May 1976, have taken college level courses. Thirty-six percent were involved in post- secondary education not leading to a standard college degree. On- job training accounted for 7.3 percent of the veteran trainees and farm cooperative training for 0.7 percent. The following table corn~ pares the types of training pursued by veterans under the World War II and Korean conflict GI bills with the type of training pursued by participants under the current bill: 29 PAGENO="0640" 3260 TABLE 3.-GI BILL PARTICIPATION BY PROGRAM, THROUGH MAY 1976 lIn percenti World Korean Post-Korean and Vietnam Vietnam era Service Type War II conflict era Veterans personnel Total 100.0 100.0 100.0 100.0 100.0 College Below college On job Farm 28.6 44. 6 17.9 8.9 50.7 36. 0 9.3 4.0 56.0 36.0 7.3 .7 60.6 33. 8 29. 4 66.2 9.4 .6 Participation Rates Vietnam era veterans have participated in VA educational assist- ance programs at a greater rate (61.4 percent) than the final participa- tion rate for either the World War II GI bill (50.5 percent) or the Korean conflict (43.4 percent). Of particular note is colleg~t-level participation which discloses that Vietnam era veterans participate at a rate twice that of World War II (60.6 percent versus 28.6 percent) all as shown in the following table: TABLE 4-3 GI BILLS-TOTAL NUMBER TRAINED, LEVEL OF TRAIN1NG AND COST 1 (COMPARISON FOR WORLD WAR II, KOREAN CONFLICT, POST-KOREAN AND VIETNAM ERA) (In thousandsl WW-II (ended) Korean conflict (ended) Post-Korean total Cumulativ e through November 1975 Between Korean - and Vietnam era Vietnam era Service Veterans person Total trained Percent College Percent Other schools Percent On-job training Percent Farm training Percent Cost (in billions) 7, 800 2, 391 6, 155 1, 344 4, 152 659 (100.0) 2,230 (28. 6) 3,480 (44. 6) 1,400 (17.9) 690 (8.9) $14. 5 (100.0) 1213 (50.7) 860 (36.0) 223 (9.3) 95 (4.0) $4. 5 (100.0) 3386 (55. 0) 2,266 (36.8) 465 (7.6) 38 (0.6) $17. 3 (100.0) 704 (52. 4) 564 (42. 0) 61 (4.5) 16 (1.2) (100.0) (100.0) 2,479 203 (59. 7) (30. 8) 1,248 455 (30. 1) (69. 1) 404 (9.7) 2 22 (0.5) I Percentages may not add to 100 percent due to rounding. 2 Cooperative farm. Following several years of participation rates which were at un- duely low levels, the Committee is gratified that the rates have at last reached respectable levels. In 1971, for example, the rate of participa- tion under the GI bill was only 32.7 percent. In large part this turnabout in participation rates is directly related to the adequacy of benefit levels. The relationship between educational assistance allowances and the. participation rate is demonstrated in the following chart which shows the number of veterans participating in each fiscal year since 1966. 30 PAGENO="0641" 3261 CHART 1.-PERSoNS i~ Tit&iiciw UNDER GI BILl,, SuccEssIvE APRILS AND NOVEMBEBS (Millions) (November 1966 through November 1975) 21 Enacted and approved December 3, 19V4, effective retroactive to September l971~. The College category excludes training taken by correspondence. College training taken by correspondence is included in the correspondence category where it makes up less than one percent of the trainees. It should be observed that with each increase in educatiOnal assist- ance rates, participation has increased, particularly following GI bill increases in 1970, 1972, and 1974. During the fall of 1971 when vet- erans had the full benefit of the increases provided by the 346 percent increases provided for in Public Law 91-219 and during the fall of 1972, when veterans had the benefit of the increases provided by Public Law 92-540 enrollment of veterans enrolled in educational programs increased by 33 percent and 8 percent, respectively over the previous year In the fall of 1973, the numbers participating showed a 31 Benefit Increase Benefit Increase Benefit Increase Benefit Increase Retroactive to 1967 February 1970 October 1972 September 19Th 1/ On JL_J AN AN A N AN A N A N 1966 1967 1968 1969 1970 1971 1972 1973 19714 A N 1975 78-226 0 - 77 - 41 (Pt.4) PAGENO="0642" 3262 14-percent increase over 1972, and the following year reflected a 6.4- percent increase. Subsequent to enactment of the Vietnam Era Vet- erans' Readjustment Assistance Act of 1974 (Public Law 93-508), the number of veteran enrollments in the fall of 1975 increased by 17.7-percent over the fall of 1974. Need for I',wreases in Educational Assistance Benefits The Committee has given careful consideration to a number of pro- posals to improve and expand educational assistance benefits for vet- erans. Although many of these proposals have merit, the Committee is cognizant of the constraints imposed by the Congressional Budget Act and this year's concurrent resolution on the budget. Although the resolution adopted by Congress, with respect to function 700-Vet- erans' Benefits and Services-is $2.4 billion above the President's request, it is nearly a billion dollars below that recommended by the Committee on Veterans' Affairs. Consequently, it has been necessary for the Committee to limit its consideration of increases and improve- ments in veterans' readjustment assistance benefits in order to assure that the congressionally adopted budget limits are not exceeded. Since the effective date of the last increase in monthly educational assistance allowances on September 1, 1974 (from $220 to $270 a month for a single veteran), the cost of living has increased 13.9 percent as of July 1q76. Pertinent data on the change in the Consumer Price Index are reflected in the following table: TABLE 5.-U.S. DEPARTMENT OF LABOR, BUREAU OF LABOR STATISTICS CONSUMER PRICE INDEX 1974 1975 197 January 139.7 156.1 166.7 February 141.5 157.2 167.1 March 143.1 157.8 167.5 April 144.0 158.6 168.2 May 145.6 159.3 169.2 June 147. 1 160.6 170. 1 July 148.3 162.3 171.1 August 150. 2 162. 8 September 151.9 163.6 October 153.2 164.6 November 154.3 165.6 December 155.4 166. 3 Thus, given continued increases in the Consumer Price Index, the increase in the cost-of-living can reasonably be expected to exceed 14 percent by October 1, 1976. After a close examination of the funds made available to it under the concurrent resolution on the budget, the Committee on Veterans' Affairs adopted an increase of 8 percent, an increase which can be accommadated within the budget limits. Accordingly, the monthly full-time institutional rate for a veteran with no dependents is increased from $270 to $292. The rate for a veteran with one dependent is increased from $321 to $347 a month. The addition of a child further increases the r'~te from $366 to $396 a month with provision for an additional $24 a month for each depend- ent in excess of two. Three-quarter and one-half-time rates are also adjusted upward proportionally by an 8-percent rate. 32 PAGENO="0643" 3263 A chronology of the development of the educational rates since the inception of the current GI bill (including those proposed by S. 969, as amended) are shown in the following table: TABLE 6.-CHRONOLOGY OF ACTUAL AND PROPOSED EDUCATIONAL ASSISTANCE RATES Law and type of course Single veteran Veteran and 1 dependent Veteran and 2 dependents Additional dependents Public Law 89-358, June 1, 1966: Full-time institu- tional $100 $125 $150 Public Law 90-77, Oct.1967: Full-time institutional 130 155 175 $10 Full-time cooperative farm Full-time on job 105 80 125 90 145 100 7 Public Law 91-219 Feb. 1, 1970: Full-time institutional Full-time cooperative farm Full-time on job 175 141 108 205 165 120 230 190 133 13 10 Public Law 92-540, Oct. 1, 1972: Full-time institutional 220 261 298 18 Full-time cooperative farm Full-time on job 177 160 208 179 236 196 14 8 Public Law 93-508, Dec. 3, 1974, retroactive to Sept. 1, 1974: Full-time institutional 270 321 366 22 Full-time cooperative farm Full-time on job 1 S.969, as amended, Oct. 1, 1976: Full-time institutional 217 189 292 255 212 347 289 232 396 17 9 24 Full-time cooperative farm Full-timeon job 235 212 276 238 313 260 18 11 I Increased by Public Law 93-602 Jan. 1, 1976: Full- timeon job 196 220 240 10 With respect to additional allowances for dependents, the Com- mittee observes that nearly 80 percent of all veterans training On a half-time or better basis receive such additional allowances. Sixty- one percent are paid for two or more dependents, all as shown in the following table: TABLE 7.-DEPENDENCY STATUS FOR VETERANS IN TRAINING, NOVEMBER 1975-COMPAR15ON FOR CURRENT GI BILL BY PEACETIME POST-KOREAN AND VIETNAM ERA VETERANS T otal current GI bill veterans Peacetime post-Korean veterans Vietnam era veterans All trainees Trainees time or more All trainees, Trainees 3'~time or more All trainees Trainees 4tim or mor: Total Percent Not paid for dependents_ Percent Paid for 1 dependent_ Percent Paid for 2 or more 1, 739, 495 1, 497, 656 351, 915 287, 166 1, 387, 580 1, 210, 490 (100.0) 560,413 (32. 2) 273, 498 (15.7) (100.0) 318,574 (21. 3) 273, 498 (18.3) (100.0) 83,472 (23. 7) 23, 087 (6.6) (100.0) 18,723 (6. 5) 23,087 (8.0) (1000) 476,941 (34. 4) 250, 411 (18.1) (100.0) 299,851 (24. 8) 250, 411 (20.7) dependents Pelcent 905 584 (~2. 1) 905, 584 (60. 5) 245, 356 (69. 7) 245, 356 (85. 4) 660, 228 (47. 6) 660 228 (~4. 6) -~-~t: PAGENO="0644" 3264 Additional 9 Months of Unrestricted Eligibility S. 969, as amended, would grant those veterans-and eligible de- pendents and survivors under chapter 35-entitled to up to 36 months (or 4 regular school years) of educational assistance, an addi- tional 9 months of entitlement for the pursuit of educational pro- grams without the limitation as to baccalaureate degree currently set forth in law. This additional school year of entitlement unrestricted as to use is identical to provisions incorporated in S. 2784 and passed by the Senate in 1974. These provisions were opposed by the adminis- tration and not accepted by the House. Currently, veterans are entitled to an additional school year (9 months) of educational assistance in order to aid them in securing an undergraduate degree. While this pro- vision aids those who have difficulty securing their undergraduate de- gree in the normal period of time, it is discriminatory with respect to those who have obtained their degree without delay a-nd does not en- courage veterans to make the most efficient use of their benefits. Conse- quently, it penalizes industrious veterans and deprives the Nation of benefits which result from the skills acquired by this additional school- ing. Thus, the reported bill encourages the most efficient and beneficial use of the additional entitlement. Ecepa~ided VA Education Loan Program In addition to the educational assistance allowance increases, the reported bill also significantly expands and improves the VA direct education loan program to assist those veterans or eligible persons who wish to attend higher cost institutions. Currently, a veteran without dependents receives an educational assistance allowance of $2,430 an academic year (under the reported bill, the veteran would receive $2,628) to assist in covering school and subsistence costs. In addition, veterans are eligible for the VA work/study program which provides an additional $625 a school year in assistance. To- day, there are wide variations in the cost of attending various schools depending, in large part, on whether or not individual States provide significant tax subsidies to public institutions. The Office of Education, Department of Health, Education, and Welfare in its publication "Higher Education, Basic Student Charges" figures an estimated aver- age for tuition, rooms and board in the 1975-76 school year at $1,882 for public schools and $3,981 for nonpublic schools. Public 2-year school charges average $1,589 while their private counterparts average $3,012 according to the same study. The following table shows estimated average charges in current dollars for full-time, independent resident degree students in institutions of higher learning by institution type of control in the United States for the period 1960-61 to 1975-76: a4~ PAGENO="0645" 3265 TABLE 8.-ESTIMATED AVERAGE CHARGES (CURRENT DOLLARS) PER FULL-TIME UNDERGRADUATE RESIDENT DEGREE-CREDIT STUDENT IN INSTITUTIONS OF HIGHER EDUCATION, OR INSTITUTIONAL TYPE AND CONTROL: UNITED STATES, 1960-61 TO 1975-76 ICharges are for the academic year and in current unadjusted dollarsj . Total tuition, bo ard, and room Tuition and re quired fees Other Other Year and control All University 4-year 4-year All University 4-year 2-yea, 1960-61: Public $850 $919 $765 $576 $211 $252 $171 $81 Nonpublic 1, 602 1, 806 1, 503 1, 024 257 1 001 785 490 1961-62: Public 869 847 768 599 218 265 182 88 Nonpublic 1, 656 1, 882 1, 570 1, 798 906 1, 059 638 337 1962-63: Public 901 986 814 615 722 268 192 97 Nonpublic 1, 724 2,822 1 608 1 271 944 1149 869 600 1963-64: Public 926 1,026 846 630 234 281 215 97 Nonpublic 1, 815 2, 105 1, 700 1, 313 1, 012 1,216 935 642 1964-65: Public 950 1,051 867 538 243 298 224 99 Nonpublic 1, 907 2,202 1 810 1, 455 1 088 1, 297 1, 023 702 1965-66: Public 683 1,106 903 671 258 327 240 109 Nonpublic 2, 804 2, 317 1, 296 1, 559 1, 154 1, 369 1, 636 769 1966-67: Public 1,026 1,171 947 710 275 360 259 121 Nonpublic 2, 124 2 256 2, 007 1 679 1 233 1, 256 1, 162 845 1967-68: Public 1 063 1, 199 997 790 283 366 268 144 Nonpublic ~, 294 2, 544 2, 104 1 763 1 297 1, 534 1, 238 293 1968-69: Public 1,117 1,245 1,063 683 295 377 281 170 Nonpublic 2, 321 2,673 2, 237 1,876 1, 383 1, 638 1,335 956 1969-70: Public 1, 205 1, 362 1, 137 952 324 427 307 179 Nonpublic 2, 533 2,919 2, 420 1, 993 1 534 1, 809 1,469 1, 034 1970-71: Public 1,288 1,478 1,209 1,017 352 478 333 186 Nonpublic 2, 740 3, 163 2, 398 2, 104 1, 685 1, 981 1, 603 1, 110 1971-72: Public 1,357 1,579 1,263 1,073 376 526 354 192 Nonpublic 2, 917 3, 375 2, 748 2, 186 1, 820 2, 133 1, 721 1, 172 1972-73: Public 1,406 1,598 1,341 1,128 400 536 392 213 Nonpublic 2, 979 3, 460 2, 820 2,248 1, 869 2, 199 1, 775 1,213 1973-74: Public 1,524 1,691 1,492 1,242 445 571 453 246 Nonpublic 3, 184 3, 715 3, 030 2,422 2, 009 2, 373 1, 971 1,315 1974-75: Public 1,708 1,903 1,682 1,420 503 653 515 285 Nonpublic 3, 592 4, 193 3,419 2, 724 2, 290 2,701 2, 188 1,496 1975-76: Public 1,882 2,104 1,863 1,589 558 731 574 322 Nonpublic 3, 981 4, 644 3, 789 3, 012 2, 558 3,013 2,444 1, 667 Note: Data are for the 50 States and the District of Columbia for all years. Source: U.S. lYepartment of Health, Education, and Welfare, Office of Education publications: (1) "Higher Education Basic Student Charges," 1961-65, 1966-69, and (2) "Opening (fall) Enrollment in Higher Educa- tion," 1961 through 1964, 1966, and 1968. That there is wide disparity in the degree of State support for higher education as revealed by the following chart which indicates State. expenditure~s for higher educaticfln as a percentage of State personal income: 35 PAGENO="0646" .95J Iowa .94 1 Delaware - .94 1 Hawaii .94_i Florida .94_i Arkansas ~9~J Maine - .93~J Minnesota .92 1 Louisiana .92 Georgia .9~IIj Tennessee .92 1 Nebraska' .90 1 Indiana .88 I Missouri .81 1 North Dakota .80 i Pennsylvania .79 Nevada - .79 1 Virginia .78 1 Maryland 7ff_i Oklahoma .73_i South Dakota .69 1 New Jersey i~J Connecticut ~ District of Columbia :~t Massachusetts J Ohio ~lJ New Hampshire I I I I .50 .60 .70 .80 .90 1.00 1.10 1.20 130 1.40 1.50 1.60 1.70 1.80 CHART 2.-STATE EXPENDITURES a FOR HIGHER EDUCATION As A PERCENTAGE OF STATE PERSONAL INCOME, 1973-7'~ 1.67 1 Wisconsin 1.63J Wyoming 1.61 1 Arizona 1.47 1 Utah I .4QJ Alaska 1.46 1 California 1.32 1 Mississippi 1 .3~_i New Mexico I .~T1 Washington 1.251 1 New York 1.23 1 North Carolina 1.21 ]South Carolina 1.20 1 Colorado 1.20_i Idaho 1.15 ] Kentucky 1.14_i Oregon 1.07 1 Texas ~ West Virginia I~J Alabama ~ Kansas IL~~ United States i~iJ Montana `ricei ~ c~' C) _LQi_J Vermont 1.00 1 Illinois .97 1 Rhode Island .50 .60 .70 .80 .9G 1.00 1.10 1.20 1.30 1,40 1,501.60 1.70 1.80 Percent Percent a Includes revenue from State and local sources and State appropriations for under. graduate scholarship programs. Sources: Revenue from State and local sources from U.S. National Center for Education Statistics, prepublicatlon tables; State personal income from Survey of Current Business, August 1975. PAGENO="0647" Co ::::::::::::::::~:~~~ :~r 2 CD(D m -u (C) rn -~°°~ cn CD~cCDO I : 1111::..:. ~ CD~ ~-1 ~ -J J~-'CO ~ ~~C)Q' ~ (CC) =~- g ~ ~ 0 )AC~ ~ 0.3 Q)~ 0 - ,_,~< rn CD -. - - - - - - - - C) ~ --~~ co ~ ~. ~ ~ `-`CC'-JOoCJ'~ CoC~" -aCoQ CO-I r-~ -~ W(0 CO (CCC) ~ (fl CONC),-~-J (fl (fl~ -`~C-'~ I~C)-J(0~ C~C) ~-` (fl ~ ~ J C) (fCC) C) C-' - -I 2 J0(J1~ C) -, CU) C 2 -~D t(CC~)t~NC) = CO O~ ~PPOo O~JN~)P$CC)~OP$CC~NN 00090? 00 .1 7 N C-~°9° ~ CD ~CD NC)NC)COCO-1 -IC) ~ -C)-J~(CCC(f(OC)C-f CD * 8~ CC)~ W CD), C o0~0 ~ ~ Co E!.~ CJ,Co (fl~,~C0 -4N3C)(f0~CoC)Co00N)CO~~- N3C~J1(fC)~(O)-' ~ `CD 0~ooC~OopoJ p~"~ ~1 ~~3* 8 ~ 00 ~W-'o-~a(CC)CO-NC)(f(f0ui--4(J1C0s -,JC)000)O0 NC) ~ ~CD I 0 ~8 ~ )C0~'C)-JC~ ~ 0(0 ~( CCCO~N)CO~C0CoC)C0 3W00-1COJCOC)CC))COC (CC-'--IC~C)C)C), (CC~C-'C0~C-'-JC0 ~ CD. PAGENO="0648" 3268 In response to problems occasioned by the lack of accessible low-cost education, the Committee, in 1974, reported, and the Senate adopted, a partial tuition assistance allowance of up to $720 a school year in addition to the basic educational assistance allowances for those vet- erans desiring to attend higher cost institutions. This provision was strongly opposed by both the administration and by the House conferees who, among other things, believed it would open the door to serious abuse of the type witnessed in the World War II program. In the face of this intransigence, the Committee was un- able to secure approval of the partial tuition assistance allowance. It did, however, secure approval, later enacted into law over Presidential veto, of a direct education loan in the amount of $600 a school year from the Veterans' Administration to those veterans who needed the additional assistance and who were unable to secure the required amount through a federally insured loan. Currently, 23 percent of all veterans attend institutions in which the annual tuition exceeds $7~0, all as revealed in the following table: TABLE 10. -DISTRIBUTION OF TUITION AND FEES (PER SCHOOL YEAR) FOR FULL-TIME TRAINEES BY TYPE OF TRAI NEES Type of training Cos t of tuition and fees $1 to $249 $250 to $499 $500 to $749 $750 to $1, 499 $1,500 $2,250 to to $2, 249 $2,999 $3,000 and Over Total Mean Median Chap. 34-Total College level: Public Private Other residence schools: Public Private Chap. 35-Total College level: Public Private Other residence schools: Public Private Percent $416 356 1,281 166 1,053 484 418 1,875 156 800 31.2 35.6 1.7 74.9 4.9 22. 2 25. 2 2. 3 79.4 4.9 28.1 33. 8 10.0 14.8 15.6 29. 5 36.7 3. 5 14.1 22.5 17.5 20.2 9.8 5.9 15.0 19. 8 23. 5 7. 0 2.8 20.4 14.3 8.4 40.2 2.3 35.8 12. 6 9. 5 23. 5 2.0 33.2 5.7 1.7 1.6 22.6 9.6 .8 .8 19.9 4.0 8. 6 4. 2 4. 3 . 3 27 ~ 21. 3 \ .7 1.0 13.6 4.3 1.5 .4 6.1 .5 4.8 3. 1 . 5 15. 1 1.1 100 100 100 100 100 100 100 100 100 100 $598 418 1,396 251 1,203 771 511 1,925 210 976 Note: Data not available on cost of tuition and fees for chap. 31 trainees. Since VA pays these costs directly to the school many veterans did not report these costs. To date, the VA education loan program has not been utilized to the degree anticipated either by Congress or by the administration. The Committee believes that this under utilization is due, in large part, to unnecessary red tape, the lack of an effective VA outreach pro- gram to inform veterans who might benefit by the program, and the limitation of loans to a maximum of $600 per school year. Accord- ingly, the reported bill increases the maximum annual loan to $2,000 and reduces the interest being charged on those loans. The Committee further directs the Veterans' Administration to undertake an active and effective outreach program which will acquaint veterans of this program, particularly those who live in States with low participation rates. Finally, the Committee wishes to emphasize the existence of other Federal student aid programs which, to varying degrees, are avail- able to veterans as well, all as shown in the following table: 38 PAGENO="0649" TABLE 11.-FEDERAL STUDENT AID PROGRAMS FOCUSED ON UNDERGRADUATES ___________ ISeptember 1975j _*. .__ -~ ._____._~ ._~ ._ -~ ._._ ._ ~__.__ _._ __..__ *~_._ .**__. Fiscal year 1975 Fiscal year 1976 Institutions Students Administrative appropriations appropriations participating, aided, fiscal Amount per student, fiscal Program agency (millions) (millions) fiscal year 1975 year 1975 Basic eligibility Selection process year 1976 Basiceducation opportunity USOE $660 $715 5,500 605,000 * At least 4time To all who apply and Maximum: $1,400; minimum: grant (BEOG). undergrad. and meet USOE needs $200; average: $675 (fiscal test. year 1975). Supplemental education op- USOE $240 $240 3,252 305,000 * do By institution to students Maximum: $1,500; Average: portunity grant (SEOG). with documented $697 (fiscal year 1975). need. 1 State student incentive USOE/States $202 (States $44 (States 45 States, 3 80,000 * do State selection based on Maximum: $1,500 average grants (SSIG). match). match) (H.R. territories, need criteria, award: $500 (fiscal year 5901). 1975)-includes State and Federal. Social security education SSA (HEW) $779 $880 NA 482,000 18 22 yr dependent No other needs test Several variables determine benefits, of S.S. eligible, amount; estimated average: $1,000/yr. Assistance for Indian BIA (Interior) $32 $32 (H R 300 (estimate) 16 000 ~ Indian blood home By institution Based on From $100 to full support students. 8773). on reservation, need, includes dependent; aver- age-(fiscal year 1975). Nursing grants Health Resources $6 $4 (H.R. 1,225 6,000 Enrolled fulltime in do Maximum: $2,500/yr; $10,000 Administration 8069). approved program), total; average: $1,000 (fiscal (HEW). year 1975). Law enforcement education LEAA (Justice)~_ $45 $40 (H.R. 1,036 100000 Enrolled in under- By institution; not Loan maximum: $2,200/yr; (grants and loans). 8121). graduate or graduate based on need, grant; $400 per semester. (estimate). program approved by LEAA. ROTC scholarship DOD $25 (fiscal year In committee -- 383 (fiscal year 19,000 (fiscal At least 17 yr old and National competitive Amount varies depending upon - 1974). 1974). year 1974). desire a career in basis, tuition, books, and fees of WORK STUDY the armed forces, particular school attended. College work study (CWS) USOE $420 $390 3,154 560,000* At least half-time By institution to Average: $481 (fiscal year undergraduate or students with 1975). graduate, documented need.1 PAGENO="0650" TABLE 1L-FEDERAL STUDENT AID PROGRAMS FOCUSED ON UNDERGRADUATES-Continued (September 19751 Fiscal year 1975 Fiscal year 1976 Institutions Students Administrative appropriations appropriations participating, aided, fiscal Amount per student, fiscal Program agency (millions) (mdlions) fiscal year 1975 year 1975 Basic eligibility Selection process year 1976 LOANS National directstudent loan USOE $329 $332 (H.R. 2,810 680,000* do By institution with Maximum: $2,500 for 1st 2 (NDSL). 5901). documented need.1 yr; $5,000 maximum for undergraduate; $7,500 maxi- mum includes both under- graduate and graduate; average: $438 (fiscal year * 1975). Federally insured student USOE Subsidies: Subsidies: 19,000 lenders - 600,000 3* do Student finds lender; Maximum: $2,500/yr with loan (FISL). $382; $452; (FISL only), school documents $7,500 total maximum for defaults: defaults: 470,000 enrollments~atus undergraduate; $10,000 $197. $202. (GSL). and education costs. maximum includes graduate; average: $1,311 (fiscal year Nursing loans Health Resource $23 9 (H.R. 8069)_ - 1,151 28,500 Enrolled full time in By institution; based Maximum: $2,000/yr; average: Administration approved program. on need. $800 (fiscal year 1975). (HEW). 1 Mostschools use 1 of 2 national services to determine expected family contribution. 24 States use direct Federal insurance; the others have their own State guarantee agency for 2 In fiscal year 1975 States spent $457,000,000 on State scholarships; $20,000 000 matched by Fed Ipans wiich the Federal Government reinsures at 80 percent. These States agencies serve an addi- tional 470,000 students. eral funds. Source: Prepared from data supplied by appropriate agencies. PAGENO="0651" 3271 Vocational Rehabilitation for Disabled Veterans The welfare of the 496,000 disabled Vietnam era veterans continues to be of great concern to the Committee. These are the veterans who have been and will continue to be most severely affected as a result of their military service. Since the end of the World War II, the Congress has recogrnzed the need for special vocational assistance, beyond compensation, to help disabled veterans find and train for a new career. The mission of the vocational rehabilitation program is to assist service-disabled veterans in need of rehabilitation to overcome the handicapping effects of their disabilities and to prepare for, obtain, and hold productive employment. Through individualized counseling, each veteran is helped to select a suitable vocational objective and to plan a program of rehabilitation training to achieve the goal selected. The VA provides all necessary medical, prosthetic, and other services and special supplies and equipment for successful rehabilitation. VA rehabilitation staff maintain continuing close contact with the veteran throughout the training to assist as needed. While in training, the veteran receives a monthly subsistence allowance, in addition to dis- ability compensation. The VA also pays the cost of tuition, books, and supplies to the training facility. On completing training, the veteran is helped to secure and maintain employment in the field for which he or she trained. During fiscal year 1975, the eligibility requirements for vocational rehabilitation applicable to certain service-disabled veterans were liberalized, making benefits potentially available to many more vet- erans. Prior to the enactment of the Vietnam Era Veterans' Read- justment Assistance Act of 1974 (Public Law 93-508) veterans hav- ing a compensable disability rated less than 30 percent resulting from service after the Korean conflict, or during the period between World War IT and the Korean conflict were not automatically eligible for the vocational rehabilitation program. Public Law 93-508 provided automatic qualification for these disabled veterans, thus applying a standard identical to that in effect for disabled veterans of World War II and the Korean conflict. Determination as to need for voca- tional rehabilitation is now made on the basis of the same criteria for all veterans otherwise eligible. Information about this change in the law and its meaning to them was sent to all affected veterans whose basic termination date for benefits `had not passed. Public Law 93-508, as subsequently amended by Public Law 93-602, also increased the subsistence allowance for vocational rehabilitation trainees approximately 22.7 percent over the rate in effect prior to September 1, 1974. The. impact of these liberalizations on the use of vocational, rehabilitation `benefits began to be evidenced in the latter part of fiscal year 1975. During the period January through June 1975, the number of veterans counseled and the number who entered into training under the vocational rehabilitation program showed an increase over the numbers so served during January `through June 1974. For the year as a whole, however, the rehabilitation training program decreased in size, with a total of 24~840 veterans in training, 7.9 percent fewer than the 26,974 enrolled in fiscal year 1974. This represents a continuation~of th jline4hat has occurred each year `41 PAGENO="0652" 3272 since fiscal year 1972, when the number of veterans in rehabilitation training totaled 31,635, the peak for the Vietnam era. Of those in training in November 1975, 15,354 were attending colleges and uni- versities, 2,366 were in trade or technical schools or in special training situations, such as rehabilitation centers, and 507 were in on-job and on-the-farm training, all as shown in the following table: TABLE 12.-CHAPTFR. 31-TRAINING TIME, DEPENDENTS, FOR ALL IN TRAINING [On Nov. 30, 19751 Percent Total Percent paid for trainees full time dependents Grand total 15,354 81.2 74.1 Institution of higher learning (ILH) total 11, 639 81.6 73.6 Graduate 617 82.0 71.8 Junior college 3, 172 77.6 77.6 Degree 3,111 77.7 77.9 Nondegree 61 75.4 60.7 Other undergraduate 7, 850 83.2 72. 1 Degree 7,752 83.1 72.2 Nondegree 98 86765.3 Other schools, total 2,366 83.1 72.3 Vocational/technical 2, 137 83. 5 72. 4 Elementary/secondary 139 80.6 69.8 Spec. rehab., rest 34 73.5 73.5 Spec. rehab., voc 27 66.7 55.6 Homebound 9 89.1931 Institutional on-farm 102 99.0 92.2 On-job training, total 507 96.3851 Apprentice 106 94.3 82.1 Other 401 96.8 85.9 740 79.2 Title I of S. 969, as amended, increases the monthly subsistence allowance payable to disabled veterans training under chapter 31 by 8 percent. Thus, the full-time institutional rate for a veteran with no dependent is increased from $209 to $226 a month. For a veteran with one dependent the monthly subsistence rate increases from $259 to $280; for two dependents the rate is increased from $304 to $329; and $24 is added for each dependent in excess of two. Title I also repeals the limitations of the use of vocational rehabilitation eligibility con- tained in chapter 31 for more seriously disabled veterans. Under the amendment, the Administrator is given discretionary authority to extend the entitlement for whatever period is necessary for the veteran based upon the veteran's disabibty and need for vocational rehabilita- tion. The reported bill also permits the utilization of Federal agencies to provide training and work experience for certain disabled veterans on an unpaid basis. Such authority is now authorized for handicapped individuals under provisions of title V of the Rehabilitation Act of 1973 (Pub1ic Law 93-112). 42 PAGENO="0653" 3273 Finally, the Committee observes, as it did in its 1974 report, that in its review of chapter 31 it has discovered many inconsistencies and much outdated terminology. Regulations issued thereunder are of little assistance in further interpreting the chapter. The Committee thus intends and expects that the Veterans' Administration will thoroughly review chapter 31 for possible legislative and adminis- trative changes, particularly in light of legislative action taken by Congress in the Rehabilitation Act of 1973 which substantially re- structured and redefined concepts regarding handicapped individuals, and employment services, and opportunities for them. In this con- nection, appropriate officials of the Veterans' Administration should consult with `the Commissioner of the Rehabilitation Services Ad- ministration. Following such a review, the Committee anticipates reenacting chapter 31 in order to clarify and update language which is difficult to understand and often appears to be archaic. Benefits for Survivors and Dependents Title III of the reported bill also expands and improves chapter 35 which provides assistance to survivors of veterans who died of serv- ice-connectedcauses or to dependents of those veterans whose service- connected disabilities are rated total and permanent. In existence for over 20 years, this program is the result of congressional determina- tions that the death, disability, or prolonged absence of the father or husband threatens the economic well-being of families. Without such a program, children might not be able to go on to school when the earn- ing power of the veteran is not available to the family. Wives and widows often have the principal responsibility for supporting the family thrust upon them so that, in the words of former Administrator William J. Driver, "it is preferable and necessary to encourage widows to return to the `mainstream' both economically and socially. This goal could be furthered through additional education." In recent years, Congress has expanded and improved the programs on a number of occasions. In 1970, Public Law 91-589 extended chap- ter 35 assistance to spouses and childreii of service personnel who were listed as prisoners of war, missing in action, or interred by a foreign government for more than 90 days. Special assistance for educationally disadvantaged survivors and dependents-including free high school completion and post-secondary tutorial assistance- was also authorized for the first time by the Vietnam Era Veterans Re- adjustment Act of 19Z2 (Pu~b1ic. Law 92-540). Public Law 92-540 áI~n a~end~d~ddit.ional training and educational options to chapter 35 eligible persons including postsecondary voca- tional objective programs and apprenticeship and on-job training. The Vietnam Era Veterans' Readjustment Assistance Act of 1974 (Public Law 93-508) further equated chapter 35 benefits with those authorized under chapter 34 by authorizing survivors and dependents to participate both in the new VA educational loan program and in institutional farm training programs. Consistent with the extension 413 PAGENO="0654" 3274 of the delimiting period for veterans under chapter 35, wives and widows were also granted another 2 years within which to use their eligibility. The 1974 amendments also extended to chapter 35 wives and widows the same full range of employment assistance benefits (including pri- ority referral to jobs, job training and counseling) as is mandated for eligible veterans by State employment agencies under chapter 41 of title 38. Finally, increases of 23 percent in the educational assistance allow- ances were provided by Public Law 93-508. As of November 19, 1975, there were 12,127 spouses or surviving spouses and 55,709 sons and daughters training under chapter 35. Of this number, 91 percent were intraining at the college level. The dis- tribution of dependents by type of training is shown in the following table: TABLE 13.-CHAPTER 35-DEPENDENTS EDUCATIONAL ASSISTANCE (Persons in training-November 1975j . . Total Orphans Children of 100 percent disabled Widow(ers) Spouses of 100 percent disabled Children of service personnel missing in action Spouses of service personnel missing in action Total College Graduate Junior college Other under- graduate Schools other than college Special restorative On-job training 67,836 29, 550 26,092 7, 635 4,454 67 38 - 61, 693 27, 764 24, 243 6, 202 3, 385 65 34 2,426 22, 853 36,414 876 9, 260 17,628 821 7, 822 15,600 504 3, 718 1,980 218 2, 027 1,140 0 12 53 7 14 13 5,880 25 238 1,648 12 126 1,755 9 85 1,417 1 15 1,055 3 11 2 0 0 3 0 1 The improvements and increases in the chapter 35 program are di- rectly reflected in the rapid growth of eligible persons training under this chapter. In the past 3 years, the numbers in training have increased from 40,113 to 67,836 or an increase of 69.1 percent, all as reflected in the following chart: 44 PAGENO="0655" 3275 CHART 9.-PERSoNS IN TRAINING UNDER CHAPTER 35 (November 1975) Number of Trainees (Thousands) Spouses and vidovs(ers) became eligible Benefit Increase Benefit Increase Benefit Increase December 1968 February 1970 October 1912 1/ January 1975 90 80 10 60 50 Total Chapt ~s0 30 Sons and daughters 20 Spouses and 10 vidovs(ers) *rdIIIfl__15.$aaa 355100 .s55IssI.s _.___L___ I ,~ i i_ _i , ___________ N A N A N AN A N AN AN A N AN A N 1966 1967 1968 1969 1970 1971 1972 1973 19Th 1975 21 Nev benefits vere included along vith the benefit increases. These included on-job training, lump sum payment for less than halt-time school training and tutorial assistance vhen needed. Correspondence school training and free entitlement for secondary school training available to spouses and vidovs(ers) only. Title III of S. 969, as amended, would further improve and expand the survivors and dependents educational assistance program. Edu- cational assistance allowances are increased by 8 percent. Maximum eligibility for benefits is for the first time extended from 36 to 45 months for all persons training under chapter 35. The maximum period of eligibility for use of benefits for children is extended in all cases to 8 years (currently 5 years in some instances). Consistent with past congressional efforts to equalize chapter 35 provisions with those applicable to veterans under chapter 34 when- ever appropriate and feasible, title III contains a number of amend- ments which clarify and codify provisions with respect to independent study, satisfactory progress and the definitions of "institution of higher learning" and "standard college degree". A number of technical con- forming amendments are also made to chapter 35. Finally, amendments are made to chapter 41 to include chapter 35 eligible persons among 45 - PAGENO="0656" ~3276 those preferred for local veteran employment representative (LVER's) positions. Because LVER's now render employment assist- ance services to chapter 35 eligible spouses and surviving spouses as well as to veterans, the Committee believes it is consistent to extend preference in filling those positions to them as well. VA Education Program Administration Amendments To Curb Abuse and Overpaqments The vast majority of VA educational payments are made to veterans who are seriously pursuing an education or training program. In recent years, however, a minority of veterans and institutions have abused the program in a variety of ways resulting in improper pay- ments. Amendments contained in the 1972 and 1974 GI bill acts were principally directed at problems the Committee had found with re- spect to nondegree vocational objective programs. In 1972~ for ex- ample, following a report by the General Accounting Office of the low completion rates in correspondence courses, and in response to other testimony received by the Committee, the Senate passed provisions, later enacted in Public Law 92-540, which provided for full disclosure of the obligations of both the institution and veteran together with a 10-day mandatory cooling-off period. Following that period, a writ- ten affirmation of intent to be bound by the agreement was required of the veteran before he became financially obligated in any way to the correspondence school. Public Law 92-540 also required correspond- ence schools to refund tuition to veterans who terminate prior to course completion on a lesson completed basis rather than a time-elapsed basis. In 1974, responding again to substantial problems manifested with respect to nondegree vocational programs, the Committee added sever- al provisions which were enacted as part of the Vietnam Era Veterans' Readjustment Assistance Act of 1974 (Public Law 93-508). The first of these concerned the so-called "85-15" rule, which re- quires, as a condition of course approval, that at least 15 percent of the enrolled not be in receipt of Federal veteran assistance payments. That rule was significantly expanded to cover many vocational courses not previously subject to it. Second, the statutory prohibition against VA payments for courses which are avocational or recreational in character was strengthened by extending it to cover those courses with advertising containing significant avocational or recreational themes. Third, a new section 1796 was added to title 38 which directs the Administrator not to approve enrollment of an eligible veteran or eligible person in any course offered by an institution which "utilizes advertising sales or enrollment practices of any type which are errone- ous, deceptive, or misleading either by actual statement, omission, or intimation". To aid the Administrator in carrying out investigations and making determinations, the section further directed him to enter into an agreement with th~e Federal Trade Commission to utilize, whenever appropriate, its services and facilities. The agreement was at last entered into on January 20,1976. Finally, and perhaps the most impOrtant of the 1974 amendments, was the added requirement that the Arministrator not approve the 46 PAGENO="0657" 3277 enrollment of veterans in any vocational objective program which could not demonstrate that at least 50 percent of its available course graduates in a preceding 2-year period had secured employment in the occupational category for which the course was designed to provide training. In the 2 years following the 1974 amendments, there have con- tinued to be some problems with postsecondary vocational courses. The most significant development, however, has been the uncovering of problems and abuses with respect to veterans attending degree granting institutions. In the past several years, substantial VA over- payments have been established. These overpayments often have been the result of lack of timely notification by the veteran and/or the school, of changes in training status or of slow administrative process- sing of these changes by the Veterans' Administration itself. (See, for example, the March 19, 1976, GAO report "Educational Assist- ance Overpayments, A Billion Dollar Problem__A Look at the Causes, Solutions, and Collection Efforts".) It should be noted that most of these administrative overpayments are recovered by the Vet- erans' Administration generally as a result of "setoff" against subse- quent VA educational entitlement payments. Apart from these administrative problems of lack of timely notifi- cation and tardy processing, however, is mounting evidence that many veterans are enrolling in courses (often with the active encourage- ment and complicity of certain schools), not to pursue an education or training program, but solely to receive VA monthly assistance allow- ances. Although the extent of these abuses is generally unquantified and only partially reflected in established VA overpayments, compli- ance surveys by the Veterans' Administration in the past year reveal that it can be quite extensive at certain schools. Consequently, the reported bill strengthens and clarifies various ad- ministrative provisions of title 38 to ensure that educational assistance benefits are paid only to those veterans who are, in fact, seriously pur- suing a course of education. In earlier years, both statutory provisions and Veterans' Administration policy placed great reliance on ac- credited institutions of higher learning. Both the Congress and the Veterans' Administration expected that these schools would take responsibility for enforcing standards of progress which assured that veterans either proceeded to secure their degree at a normal pace or were not permitted to receive VA benefits as students in good stand- ing. But, as the Chief Benefits Director of the Veterans' Administra- tion testified earlier this year, there have been:. changes in educational practices and philosophy in recent years which have been susceptible to abuses by some students. Some colleges have turned increasingly to open-door enroll- ment practices, nonpunitive grading, lax reporting of attend- ance and liberalized withdrawal policies. Such policies, he testified, were: accompanied by noor reeordkeeping and inadequate errforce- ment of standards of progress, [which] resulted in the VA paying subsistence allowance to many veterans and other eli- 47 78-226 0 - 77 - 42 (Ft. 4) PAGENO="0658" 3278 gible persons who were not actually in training. Some stu- dents would enroll for full-time training, receive benefits for a semester and then withdraw prior to examination time, without ever attending class. We had relied on institutions of higher learning to have standards of progress and to report to the Veterans' Adminis- tration promptly when they were not being met. This was nec- essary because the law requires that benefits to a veteran must be terminated when the recipient is not making satisfactory progress in his or her program of education. `The opportunities for overpayment from such school pol- icies have increased with our liberalized provisions for cer- tifying periods of enrollment and verifying periods of at- tendance to facilitate timely and uninterrupted payments of educational benefits. These provisions have largely accom- plished the goal of timely payment of benefits. But, in those cases of discontinued schooling, or reduced training time, when notification was not timely received by the Veterans' Administration, such policies resulted in substantial over- payments. The Legislative Director of the State approving agencies testified that in the absence of more specific criteria for determining standards of progress and "with schools using a nonpunitive grading system that only computes passing grades as the grade point average (GPA) it is impossible to lvtve ui~satis factory progress." The House Appropriations Committee study of VA overpayments, released on March 5, 1976, noted that: An important change has taken place in colleges-the liberalization of grading policies. VA officials said that in recent years, schools experienced a strain on their budgets that made them change their academic standards. Some schools were aggressively trying to enroll students and keep them in school. They had to increase school revenues, and quality suffered as a result. Grading policies changed to do away with punitive grades. Students were permitted to with- draw from courses or take grades of "incomplete" at the 11th hour, rather than `fail courses. In the few cases where such pol- icies were questioned, schools indignantly replied that they were independent of outside criticism because they were ac- credited institutions. They considered themselves immune from outside interference. By giving in a little at a time, the VA lost control over the education program. In effect, an honor system developed where the VA left it up to the veterans and the institutions to report changes and terminations; but it was not in the interests of either to do so. The Legislative Director of the State approving agencies associa- tion was even more blunt. He testified this year that "what we have been doing is using the old honor system * * * but, we came to find out that we had the honor and the others had the system." 48 PAGENO="0659" 3279 The following are some representative cases uncovered by House Veterans' Affairs Committee investigators after surveying the records of students at one school which was part of the committee's hearing record: Case No. 1.-The veteran in this case has been attending school on a continuous basis since January 1973. His transcript indicates that he attended 14 terms, most of them on a full-time basis. He attended 68 semester hours but earned credit for 31 or less than half. The grade point average for the full-time he attended is 1. He failed to receive a passing grade six consecutive terms starting with the winter term 1972-73. During the same period, the VA indicates that this veteran received his full educational allowances. Case No~ £.-This is a typical case which occurs all too fre- quently in the transcripts furnished the Committee. The veteran has completed two full terms starting in the fall of 1974-75. He received all F's except in three courses which he failed to com- plete, yet he is certified as being in good standing. Case Nos. 3 and 4.-The veteran failed to receive a grade point average for three straight terms, yet in good standing. Case No. 5.-A veteran in training since January 1973; has no grade point average for over half of the time he has been in school including the last four terms. Case No. 6.-The veteran has been enrolled continuously since 1971 but has a grade point average of only 1.88. Case No. 7.-Veteran flunked or withdrew on all courses for four consecutive terms but remained in good standing at all times and then completed last two terms with passing grades. Case No. 8.-Despite flunking all courses for two consecutive terms, veteran was permitted to continue the third term with no penalties. Case No. 9.-Veteran had been drawing full benefits though he received no grade points for nine consecutive terms. Case No. 10.-Veteran never passed a course for five consecutive terms yet certified to be in good standing. The Committee wishes to emphasize that it does not undertake to assess the merits of changing educational practices with respect to enrollment policies, nonpunitive grading, attendance requirements, or liberalized withdrawal policies. But, when such policies are coupled with substantial Federal benefits, abuse, and contravention of congres- sional intent can result (and unfortunately has resulted). In the most recent fiscal year, the American taxpayer will fund $5.7 billion in VA educational assistance benefits. These benefits tare specially pred- icated upon serious pursuit of educational or vocational objectives by veterans and are not intended as a gratuitous income supplement program. As such, the Committee would be derelict in its duty if it did not prescribe procedures designed to reduce actual or potential abuse and to ensure that Federal tax dollars are spent in the manner intended by law. Accordingly, the reported bill establishes certain minimum standards and directs schools to develop within the framework estab- lished in title 38 more specific standards of progress to be `applied to 49 PAGENO="0660" 3280 veterans in attendance at their respective institutions. Equally im- portant, such standards, which are to be certified to the Veterans' Administration, must be actually enforced by schools. Schools are required by law to notify thB VA promptly when a veteran ceases to maintain satisfactory progress. Generally, unsatisfactory progress, changes, withdrawals, and unscheduled interruptions must now be reported to the Veterans' Administration within 30 days of their occurrence. Current VA regulations with respect to independent study and the auditing of courses are clarified and codified. Other amendments in the reported bill which are intended to reduce the possibility or extent of abuse include first, extension and expan- sion of the "85-15" rule to all institutions enrolling veterans; and second, the deletion of existing statutory exceptions to the~ statutory requirement of 2 years of operation prior to VA approval of enroll- ment of veterans. Under the reported bill, the 2-year rule would apply to certain branches or extensions of institutions. In both of these situations, the reported provisions are intended to allow the free market mechanism to prove the worth of the course offered, by requiring that it respond to the general dictates of an open market as well as to those with available Federal moneys to spend. In the first instance at least 15 percent of the enrolled students must not be in receipt of VA payments or other Federal grants. In the second instance, the school must demonstrate that it can operate for at least 2 years independent of the influx of veterans in receipt of Federal payments. Another amendment intended to prevent abuse prohibits veteran enrollment in correspondence courses (or the correspondence portion of a combined correspondence-residence course) leading to a vocational objective which is normally completed in less than 6 months. Statutory provision prohibiting the assignment of veteran benefits are further clarified and strengthened. The Administrator is also directed to carry out a study of vocational objective programs and report back to Congress within 6 months with such administrative `and legislative recommendations as may be necessary and appropriate to assure that such programs are in com- pliance with all applicable provisions of title 38, particularly the 50- percent employment requirement (38 U.S.C. § 1673(a) (2)) previously discussed. Preliminary findings of a review of the operations of the provisions of the 50-percent rule currently being conducted by the General Accounting Office at the Committee's request would appear to indicate not only that there is insufficient VA monitoring of the data being submitted by schools but that the provision as implemented by the agency may not be fully effectuating the intent of the statute. The provisions of section 1796 whi~h direct the Administrator not to approve the enrollment of veterans in any course offered by an in- stitution utilizing erroneous, deceptive, or misleading sales or enroll- ment practices is strengthened by requiring institutions to maintain complete records and copies of all advertising sales materials utilized by it or on its behalf ~ring a preceding 12-month period. New section 1793 is added to require the Administrator to~ conduct an annual compliance survey of most instiutions enrolling eligible veterans. These compliance surveys are intended to verify and assure the propriety of payments of educational benefits to eligible institutions 50* PAGENO="0661" 3281 and to determine whether there is any deviation from the requirements of the law by eligible individual schools or establishments. In this cormection, title 38 is also clarified to assure access to pertinent student records in order to determine compliance with the provisions of title 38. The increased compliance surveys specified in the formula contained in new section 1793 will require the addition of 200 new VA compliance specialists. Finally, the Committee wishes to emphasize that there are a number of criminal sanctions in the United States Code applicable to veterans or school officials who seriously abuse the VA educational assistance program. They include: 18 U.S.C. 1001 (false statements generally); 18 U.S.C. 371 (conspiracy to defraud) ; 18 U.S.C. 287, (false, fictitious, or fraudulent claim); 38 U.S.C. 3502 (fraudulent acceptance of pay- ments); 18 U.S.C. 1341 (fraud, swindles-use of mails); 18 U.S.C. 1961-1963 (racketeering); and 31 U.S.C. 231 (False Claims Act). Section 1001 of title 18 is directed toward any individual who know- ingly and willfully conceals a material fact or makes a false, fictitious, or fraudulent statement or representation to any Federal agency. Pen- alties under that provision provide a fine of not more than $10,000, or imprisonment for not more than 5 years, or both. If two or more persons conspire to commit any offense against the United States, or to defraud the United States (or any Federal agency) they are subject to a fine of not more than $10,000, or im- prisonment for not more than 5 years, or both, by virtue of 18 U.S.C. 371. Section 287 of title 18 provides that anyone who submits a false, fictitious, or fraudulent claim upon or against the United States (or any Federal agency) knowing the claim to be false, fictitious, or fraud- ulent, shall be fined not more than $10,000 or imprisoned for not more than 5 years, or both. Section 3502 of title 38 provides, that anyone who fraudulently ac- cepts monetary benefits from the VA (and entitlement to those bene- fits has ceased) or who obtains or receives any money or check under any laws administered by the VA without being entitled to it, and with intent to defraud the United States or any beneficiary of the United States, shall be fined not more than $2,000 or imprisoned not more than 1 year, or both. Section 3502 may then be used in prosecutions of persons for receiving monetary benefits where entitlement has ceased, or persons who receive `any money or check where there never was entitlement to receive such, if there is intent to defraud. In contrast to section 1001 of title 18, there need not be a specific showing that a false statement or misrepresentation twas made. Sections 1341, 1961, 1962, and 1963 of title 18 were recently utilized in.indicting the principal figure in a major education fraud investiga- tion. Section 1341 is concerned with frauds and swindles which in- volve the use of the Postal Service. Sections 1961-1963 are the Federal racketeering prohibitions used in connection with the mail fraud charges under section 1341. The definition of racketeering under sec- tion 1961 (1'~ (B') includes any act indictable under section 1341. Section 231 of title 31, United States Oode, allows civil recovery for fraud in the submission of false claims. This provision allows the United States to bring a civil action for recovery because of the sub- mission of a false, fictitious, or fraudulent claim. Section 231 allows `51 PAGENO="0662" 3282 the United States to recover $2,000 as forfeiture and, in addition, to double the amount of damages the United States may have sustained by reason of the act. So that there is no mistaken apprehension, the Committee reempha- sizes its belief that the vast majority of veteran students are seriously pursuing an education. It also believes that most institutions are con- cerned that the GI bill program not be abused and that all require- ments of the law be complied with. The amendments made in the re- ported bill are intended to preserve the integrity of the program against a resourceful minority who would abuse it. Unemployment Among Disabled and Vietnam Era Veterans The reported bill also adopts several amendments intended to alle- viate the severe unemployment problems currently experienced by dis- abled and Vietnam era veterans. Of these amendments, perhaps the most important is the elevation to the Assistant Secretary level within the Department of Labor of responsibility for veteran employment assistance as mandated by Chapters 41, 42 and 43 of title 38, United States Code. The consolidation of responsibilities at an appropriate level of accountability should provide a focus and direction for assist- ance to veterans which~ to date, has been tragically lacking. The Committee believes that the recurring unemployment problems amongst Vietnam era veterans is a sad commentary on the American society. It is discouraging to the Committee that those who bore the brunt of this Nation's involvement in Vietnam continue to bear the brunt of this Nation's economic woes. Unemployment amongst Vietnam era veterans has been a problem since the late 1960's. In early 1971, unemployment among young veterans reached as high as 12 percent with joblessness among veterans 20 to 24 years old, minority group veterans, and disabled veterans substantially higher. The. Committee responded to this situation with a number of amendments designed to strengthen unemployment services provided veterans incorporated as part of the Vietnam Era Veterans' Readjustment Assistance Act of 1972 (Public Law 92-540). In addition to increasing benefits payable for those enrolled in apprenticeship and on-job training by 48 percent, the 1972 GI bill rewrote and strengthened chapter 41 relating to the job counseling, training, and placement services required to be fur- nished to veterans by State Employment Security Agencies. The Sec- retary of Labor was directed to ensure that any veteran seeking em- ployment assistance was "promptly placed in a satisfactory job or job- training opportunity or receive some other specific form of assistance designed to enhance his employment prospects substantially, such as individual job development or employment counseling services." Each local employment office was required to have a Local Veterans Employment Representative (LVER) unless the Secretary of Labor determined that an LVER was not needed based on a deirionstrated lack of need for such services. A formula included in the sthtute man- dated the hiring of 68 Assistant Veterans' Employment Representa- tives (AVERs). TJnfortunately~ for unemployed veterans more than a year after enactment of the 1972 GI bill only one AVER had been hired. The 1974 11 bill included measures designed to strengthen and improve the employment services afforded Vietnam era and disabled 52 PAGENO="0663" 3283 veterans. The bill included provisions requiring most Federal con- tractors to institute affirmative action plans forthe hiring and advance- ment of qualified Vietnam era and disabled veterans. Regulations im- plementing this section were not finally promulgated until late July 1976-over 19 months after the enactment of the 1974 GI bill and over half a year later than the date the Department of Labor had promised the Committee that they would be implemented following hearings which concerned their delay. And, to date, the Committee has yet to receive a written response to its inquiry of May 21, 1976, concerning the staffing of the compliance officers for the veterans' program. Despite testimony by Labor that full staffing of the veterans' affirma- tive action program would be completed by March, it is the Commit- tee's understanding that full staffing has yet to be attained. The 1974 GI bill further ordered the Secretary of Labor to develop specific performance standards for the "priority service" which must be given to veterans by all federally funded State employment agen- cies. Yet, nearly 2 years later, no specific performance standards the Labor Department itself clearly reveal that the mandate of as- sistance to all veterans seeking it is not being followed. The employment problems of Vietnam era veterans, particularly younger, disabled and minority veterans, have continued unabated. Although the depressed state of the economy continues, the Committee notes that the Department of Labor minimized it as a factor responsi- ble for the poor quality of services afforded veterans. Rather, they testified: We have found that the most significant variable in em- ployment service performed to be management. R3gardless of what other variables you look at, the economy, whether or not they have had a certain kind of system or organization, we `find some States perform better in' everything, including veterans. The variations in State performances with regard to the placement of Vietnam veterans during fiscal year 1975 is exemplified by the following table: TABLE 14.-EMPLOYMENT SERVICE PERFORMANCE INDICATORS RANKED BY STATE (Vietnam veteransj ` New , As a percent of new applications State and renewals Individuals placed applications and renewals State rank Iowa 18,098 7.519 41.5 Wyoming 5, 514 2,256 40.9 2 South Dakota 6, 271 2, 548 40.6 , 3 North Dakota 7,692 2,979 38.7 4 Alaska 6, 397 2, 380 37. 2 5 Maine 7, 587 2, 797 36. 9 1 6 Mississippi 15,994 5, 896 36. 9 1 6 Pennsylvania 43, 749 14, 889 34. 0 8 Florida 39, 364 13, 146 33. 4 9 Idaho 11,714 3,678 31.4 10 Oklahoma 33,392 10,466 31.3 11 Washington 32,081 9,885 30.8 12 Nebraska 10,052 3,028 30.1 13 Arkansas 19, 078 5, 692 29. 8 14 West Virginia 14,750 4,275 29.0 115 Arizona 19, 023 5, 517 29. 0 1 15 Utah 14,162 4,122 20.0 115 t~ansas 17,601 5,098 29.0 115 Texas 103,136 29,933 29.0 115 See footnotes at end of table. ` -.` ` PAGENO="0664" 3284 TABLE 14.-EMPLOYMENT SERVICE PERFORMANCE I NDICATORS RAN KED BY STATE-Continued [Vietnam veteransj New applications Individuals State and renewals placed As a percent of new applications and renewals State rank Tennessee 21, 788 6, 182 Louisiana 23,871 6,710 Montana 9, 978 2, 785 Kentucky 19, 489 5, 359 Oregon - 26,233 7,190 New York 52, 297 14, 186 New Mexico 13, 916 3, 644 Massachusetts 28, 766 7, 463 California 152, 909 38, 485 Rhode Island 8, 480 2, 037 Minnesota 30, 819 7, 103 New Jersey - 27, 791 6, 282 North Carolina 44, 907 10, 094 Alabama 24,433 5,465 Illinois 51, 520 11, 328 Hawaii 8,693 1,836 Missouri 47,221 9,918 Vermont 5, 334 1, 044 Virginia 36, 415 7, 078 South Carolina 23, 878 4, 493 Nevada 10,379 1,954 New Hampshire 8, 755 1, 618 Wisconsin 31, 418 5, 738 Indiana 44,793 7,845 Puerto Rico 6, 377 1, 075 Georgia 39, 299 6, 644 Connecticut 24, 281 3, 886 Maryland 21, 211 3, 316 District of Columbia 8, 306 1, 236 Ohio 69, 988 10, 154 Michigan 60,243 8,490 Delaware 5, 391 588 Guam2 Virgin Islands2 28. 4 28.1 27. 9 27. 5 27.4 27. 1 26.2 25.9 25. 2 24. 0 23. 0 22.6 22. 5 22.4 22.0 21. 1 21.0 19. 6 19. 4 18. 8 18.8 18. 5 18. 3 17.5 16. 9 16. 9 16. 0 15. 6 14. 9 14. 5 14.1 10. 9 0 0 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 1 40 140 42 43 44 1 45 1 45 47 48 49 50 51 52 1 States which tie in percentage are given the same State ranking number and the following number is omitted. 2 Information not available. Despite this testimony, no specific performance standards have been issued by this Department to the States as required by law. And there has been little effective leadership or management within the Depart- ment of Labor whose performance with respect to veterans, especially younger, disabled, and minority veterans, has been decidedly less than impressive. For example, at the end of July 1976, unemployment rates for younger Vietnam veterans was 20.0 percent, or approximately twice that of similarly aged nonveterans. At the end of June (and the most recent data available) approximately 30 percent of younger minority veterans were unemployed, a rate significantly higher than the rate for similarly aged nonveterans. Services to veterans have not been satisfactory as indicated by the Department's own fiscal year 1976 ESARS data. Despite express statutory language which requires that Vietnam veterans receive some form of specific assistance, over one-third of all Vietnam vets who asked for assistance at federally funded State employment offices had their files inactivated with no reportable service at all. The number of Vietnam era veterans seeking assistance at State employment offices increased nearly 9 percent from the same period last year, the percentage of veterans counseled was * down 6 percent, the percentage of job placements dropped 5 percent, and the percentage of veterans placed in jobs of 3 days duration or more declined nearly 6 percent. In addition, Comprehensive Employ- ment and Training Act (CETA) enrollments of Vietnam era veterans (the Federal Government's primary employment assistance program) dropped drastically, while enrollment in training also declined. 54 PAGENO="0665" 3285 The poor quality of employment services for veterans during fiscal year 1975, the most recent period for which complete data is available, is indicated by the following table: TABLE 15.-SERVICE TO VETERANS AND OTHERS BASED ON EMPLOYMENT SECURITY AUTOMATED REPORT- ING SYSTEM (ESARS)-FISCAL YEAR 1975 100.0 3,398,658 100.0 1,963,096 100.0 13. 2 173,322 5. 1 89,068 4.5 81.2 100.0 2,723,337 80. 1 100. 0 1,587,733 80.9 100.0 4.8 5.9 182,702 5.4 6.7 125,874 6.4 7.9 4.7 5. 8 180,761 5.3 6.6 124,532 6.3 7. 8 .2 .2 5,318 .2 .2 3,809 .2 .2 1.2 1.4 51,383 1.5 1.9 37,378 1.9 2.4 .9 1.1 69,737 2.1 2.6 41,0K) 2.1 2.6 1.5 1.9 138,154 4.1 5.1 91,993 4.7 5.8 1. 7 2. 1 39,429 1. 2 1. 4 29,853 1. 5 1. 9 .9 1.0 21,788 .6 .8 16,571 .8 1.0 5. 5 6. 8 278,462 8.2 10.2 178,433 9. 1 11.2 2. 1 2. 6 82,475 2.4 3. 0 54,573 2. 8 3. 4 33.1 40.7 238,645 36.4 45.5 807,340 41.1 5iL 8 32. 1 39. 5 1,215,381 35.8 44. 6 796, 542 40. 6 50. 2 1.7 2.0 55,445 1.6 2.0 31,334 1.6 2.0 16.9 20.9 592,546 17.4. 21.8 390,638 19.9 24.6 16. 0 19. 7 571,664 16.8 21. 0 380,689 19.4 24. 0 15. 0 18. 4 531, 258 15. 6 19. 5 360, 516 18. 4 22. 7 12.0 14.7 476,650 14.0 17.5 324,779 16.5 20.5 1. 7 2. 1 67,283 2. 0 2. 5 36, 061 1. 8 2. 3 1.2 1. 4 33, 186 1. 0 1. 2 16, 680 . 8 1. 1 1.0 1. 2 27,906 . 8 1. 0 14,210 . 7 . 9 .2 .3 11,434 .3 .4 6,588 .3 .4 .2 .3 6,916 .2 .3 3,134 .2 .3 .2 .2 2,589 .1 .1 2,048 .1 .1 .2 .1 2,399 .1 .1 1,982 .1 .1 .04 .1 2,787 .1 .1 2,504 .1 .2 .1 .2 8,969 .3 .3 6,198 .3 .4 3.8 4. 7 84,391 2. 5 3. 1 66,871 3.4 4.2 8 1. 0 30,273 . 9 1. 1 21,857 1. 1 1. 4 41.7 51.4 1,530,872 45.0 56.2 986,949 50.3 62.2 72.6 89. 5 2,470,578 72.7 90. 7 1,461, 583 74. 5 92. 1 Veterans All individuals Total Vietnam era Per- Per- Per- Per- Per- Per- Activity Number cent A cent B Number cent A cent B Number cent A cent B Intake (applicants avail- able) 18,512,780 Partially registered 2,451,754 New applicants and re- newals 15,035,431 Counseled 884,236 Interviews 872, 193 Group sessions 36, 649 Placed after counseljng_.~~ 213,268 Enrolled in orientation 162, 565 Referred to supportive service 286,529 Enrolled in training 316,983 CETA 157,664 Job development perform- ed 1,020,642 Placed direct to job devel- opment 394,548 Referred to a job 6, 125,870 Nonagricultural industry_ - - 5,933,710 Agricultural industry 305,616 Placed isa job 3,137,542 Nonagricultural industry_ - - 2,966,749 Over3 days 2,768,817 Over 150 days 2,212,721 3 days or less 310,249 Agricultural industry 214,908 Over 3 days 184,136 Over 150 days 46,025 3 days or less 40,853 Special programs: NAB-Jobs 28,486 JOP 8,807 Apprenticeship 9,096 PEP 27, 118 Tested 710,230 Referred to CETA 145,018 Provided some service..~__ 7,727,347 Inactive 13,449,491 After placement or training enrollemnt__ 2,940,229 15. 9 19.6 546,597 16. 1 20. 1 364,630 18. 6 23. 0 After other service_ - -- 3,690,992 19. 9 24. 5 764, 104 22. 5 28. 1 491, 166 25. 0 30. 9 With no service 6,818,270 36. 8 45. 3 1, 159,877 34. 1 42. 6 605,787 30. 9 38. 2 Active file June30 6,699,029 1,292,682 729,357 Provided positive termi- nate service 3,357, 189 18. 1 22. 3 617,062 18. 2 22.7 409, 167 20.8 25. 8 Provided other service 4,370, 158 23. 6 29. 0 913,810 26. 9 33.6 577, 782 29.4 36. 4 Provided no reportable service 10,818,484 58. 4 71. 7 1,871,976 55. 1 68. 7 978,857 49.9 61. 7 Intake (applicants avail- able) 17,723,647 100.0 3,389,889 100.0 1,882,238 100.0 Partially `registered 2,226,761 12. 6 143,427 4. 2 72,991 3.9 New applicants and re- newals._____ 13, 306,799 75. 1 100. 0 2,360,666 69. 6 100.0 1,347,781 71. 6 100. 0 Counseled 981,516 5.5 7.4 187,094 5.5 7.9 124,645 6.6 9.2 Interviews 968, 108 5. 5 7. 3 184,499 5. 4 7.8 122, 738 6. 5 9. 1 Group sessions 44,736 . 3 . 3 6,967 .2 .3 5, 132 . 3 .4 Plated after counseling - - - 235,317 1. 3 1. 8 48,707 1. 4 2. 1 34, 472 1. 8 2. 6 Enrolled in orientation.____ 106, 171 . 6 . 8 14,326 . 4 . 6 9,436 . 5 . 7 Referred to supportive service 186,905 1. 1 1. 4 65,405 1.9 2.8 44,974 2. 4 3. 3 Enrolled in training 348,601 2. 0 2. 6 51, 625 1. 5 2.2 40,095 2. 1 3. 0 CETA NA INA INA Job development per- formed 937,411 5. 3 7. 0 238,636 7. 0 10. 1 150,624 8. 0 11. 2 Placed due to job develop- ment 401,143 2.3 3.0 86,499 2.6 3.7 56,518 3.0 4.2 Referred to a job 6,203,487 35. 0 46. 6 NA INA Nonagricu)tura~ industry__ 6,024,514 34.0 45.3 1,168,661 34.5 49.5 746, 757 39. 7 55.4 Agricultural industry 300,660 1. 7 2. 3 56,862 1. 7 2. 4 29,986 1. 6 2. 2 55 PAGENO="0666" -~> ~ Cow~o>o~~ o~- rn~rri ~ ~ ~ C-~C~ ~ aa~ ~ ~ ~. 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N. -~pp' ~--~-.: ~: `.~`.~`.~ ~-~O~r PAGENO="0668" Inactive 10,978,913 After placement or training en- rollment 2, 393, 632 After other service 2, 926, 888 With no service 5,658,393 Active file June 30 5, 406, 167 Provided positive terminate service.... -- 2, 740, 127 Provided other service 3, 456, 348 Provided no reportable service 8, 946, 508 Intake (applicants available) 14, 333, 758 Partially registered 2,083,334 New applicants and renewals 10, 946, 133 Counseled 794,422 Interviews 783, 609 Group sessions 37, 769 Plated after counseling 186, 610 Enrolled in orientation 91, 845 Referred to supportive service 121, 500 Enrolled in training 296, 976 CETA INA Job development performed 698, 775 Placed due to job development 314, 644 Referredtoajob NA Nonagricultural industry 4, 855, 853 Agricultural industry 243, 798 Placed in a. job 2,724,796 Nonagricultural industry 2, 585, 229 Over 3 days 2,422,114 Over 150 days 1, 931, 574 3 days or less 261, 561 Agricultural industry 177, 288 Over 3 days 152, 461 Over 150 days 38, 467 3 days or less 33, 033 Special programs: NAB-Jobs 49,877 JOP 20,863 Apprenticeship `~, 913 PEP 73,986 Tested 725,005 Referred to CETA NA Provided some service 6, 237, 580 Inactivated 19,977,052 After placement or training enrollment After other service With no service Active file June 30 Provided positive terminate services___ Provided other service Provided no reportable service 3 .5 NA .1 .2 NA .1 .1 NA 5 *7 NA 5. 2 6.9 237, 334 3. 6 4. 6 INA 43. 5 57.0 2,937,308 44. 2 56. 5 76. 6 100.3 5,208, 566 78. 4 100. 2 2,469,714 17.2 22.6 1,289,999 19.4 24. 8 3, 156, 883 22. 0 28.8 1, 440,436 21.7 27. 7 5, 350, 455 37. 3 48. 9 2, 478, 131 37. 3 47. 7 4, 545, 041 31. 7 41. 5 2, 014, 845 30. 3 38. 8 2, 890, 033 20. 2 26.4 1, 476, 359 22. 2 28. 4 3,347,547 23.4 30.6 1,460,949 22.0 28. 1 8, 071, 000 56. 3 73. 7 3, 693,357 55. 6 71. 0 To m'ake matters worse, during the past year, the General Account- ing Office reported that on-the-job training slots specifically developed for veterans were going unfilled because neither the VA nor the De- partment of Labor had any established procedure to recontact em- ployers and to refer eligible veterans. One out of every four employers contacted, told GAO investigators that they had a need for on-job trainees and would have accepted one or more qualified veterans had they been referred. The Veterans' Administration has reported that there are 153,769 establishments approved for on-job trainees. Of that number, over 108,000 had no trainees whatsoever. If the Department of Labor had simply assured that each such establishment was contacted and 58 3288 Total Activity Number Percent A Nonveterans Percent B Male Number Percent A Percent B 15.8 19.4 19.4 23.7 37.4 45.8 18.1 22.2 22.9 28.0 59.2 72.4 100.0 14.5 76.4 100.0 5.5 7.3 5.5 7.2 .3 .3 1.3 1.7 .6 .8 .8 1.1 2.1 2.7 4.9 6.4 2.2 2.9 33.9 44.4 1.7 2.2 19,0 24.9 18.0 23.6 16.9 22.1 13.5 17.6 1.8 2.4 1.2 1.6 ~1.1 1.4 .3 .4 .2 .3 1, 239, 451 17. 3 20.6 1,339,267 18.7 22.3 2, 779, 941 38. 7 46. 2 2, 463, 357 1,381,522 19.3 23.0 1,534,801 21.4 25.5 4, 258, 723 59. 4 70. 8 6,641,560 100.0 947, 623 14.3 5, 199, 137 78. 2 100. 0 336, 578 5. 1 6. 5 331,944 5.0 6.4 13,149 .2 .3 85,500 1.3 1.6 27,824 .4 .5 51,920 .8 1.0 138,140 2.1 2.7 INA 317, 456 4. 8 6. 1 147,292 2.2 2.8 NA 2, 375, 582 35. 8 45.7 188, 100 2. 8 3. 6 1,401,767 21.1 27.0 1, 299, 646 19. 6 25. 0 1, 187, 688 17. 9 22. 8 916,454 13.8 17.6 175, 652 2. 6 3. 4 135,127 2.0 2.6 113,992 1.7 2.2 32,192 .5 .6 27,917 .4 .5 PAGENO="0669" 3289 that one veteran had been placed with each of these employers, a sub- stantial proportion of veterans employment problems would be re- duced. Yet, because of inaction, training slots have gone unfilled while the unemployment rate for veterans continues to grow larger. And while overall participation in the 11 bill program increased by 17.9 percent from November 1974 to November 1975, enrollments in apprenticeship and other on-job training decreased by 28 percent. The tragedy of the Department of Labor's failure to coordinate with the VA in regard to apprenticeship is underscored by the success of those who train under that program. For example, iii 1972, a study conducted by the Veterans' Administration revealed that those vet- erans who had completed on-job training had higher median earnings than veterans who had completed other types of training under the GI bill. And fewer on-job training veterans failed to complete their training solely as a result of financial problems than in any other veteran readjustment program. Preliminary findings of a study currently being conducted under the auspices of the Department of Labor indicate that the average income of those veterans who complete OJT is higher than average U.S. earnings and veterans who complete have incomes which con- tinue to rise rapidly thereafter. The Committee believes that if prop- erly utilized, the on-job training program has the potential to assist in easing veteran unemployment problems. Apprenticeship and on-job training assistance allowances `are increased by 8 percent under the reported bill. The tragedy of underutilization is also underscored by the recent nationally publicized actions of a Cleveland Vietnam vet- eran concerning the failure of his ex-employer to provide opportuni- ties, such as OJT, to Vietnam veterans. The Committee, of course, does not approve of the actions taken by the individual, but it does regard the incident as symptomatic of the frustrations of many veterans seeking employment assistance. The Committee also notes, with approval, the action of the Senate in regard to the OJT program. Under `H.R. 12957, as amended, and as passed by the Senate, Comprehensive Employment and Train- ing Act (CETA) prime sponsors would be required to include in the comprehensive manpower plan required to be submitted to the See- retarv, appropriate arrangements to promote maximum use of the VA on-job training program. The need for the amendment, the Com- mittee on Labor and Public Welfare found was: underscored by the continuing high unemployment rates for veterans, particularly young, disabled, and minority group veterans. Yet in the face of this harsh data, during fiscal year 1975,. only 13.6 percent of all CETA enrollees (titles I, II, and VT) were veterans. "Special Vietnam-era veterans" (those with service in Indochina or Korea) comprised only 6.9 percent of all CETA enrollees. These enrollment figures compare most unfavorably with those of veterans under the Emergency Employment Act of 1971 (EEA). where specific hiring goals were established by EEA regulations, requiring generally that 30 percent of "new ~ 59 PAGENO="0670" 3290 hire" positions be filled with Vietnam era veterans. In actual practice, 43 percent of all enrollees in EEA public service jobs EFrom 1971 to 1973 were veterans. Under the EEA through FY 1974, Vietnam era veterans comprised 28.3 per- cent of all hires. The Committee, in its 1974 report accom- panying S. 4079, noted, in connection with the subject of the absence of specific hiring goals: In the absence of that kind of authority attached to any public service employment bill, it is highly unlikely that veterans will get the special consideration this Committee believes they deserve. Unfortunately, the prediction has been realized. Veterans have fared poorly under CETA. Hopefully, the amendments passed by the Sen- ate, coupled with the amendments contained in title VI of this bill directing the Department of Labor "to promote the participation of veterans in CETA programs and monitor the implementation and operation of Comprehensive Employment and Training Act programs to assure that eligible veterans receive special consideration when required", will increase the numbers of veterans enrolled in CETA in addition to earning a glut of veterans in the lines of the unemployed. Post-T7ietnam, Era Veterans' Readjustnwnt Assista~we The reported bill attempts to achieve a reasonable balance between those who would prospectively terminate GI bill benefits and those who would allow the current program to continue without alteration. In an attempt to balance legitimate concerns about budgetary ex- penditures with the many advantages our Nation receives from GI bill expenditures, the reported bill creates a new post-Vietnam era veterans' educational assistance program. This program would re- quire service personnel to make contributions from active duty mili- tary pay which has increased substantially in recent years. In turn, matching funds at the rate of $2 for each $1 contributed, will be paid by the Veterans' Administration to veterans enrolled in approved education or training programs. The new program will result in re- duced future expenditures of GI bill moneys while, at the same time, helping assure a viable military force and continuing the important educational investments by our Nation in the youth of our country. The GI bill, and the postservice educational opportunities provided by the program, has become an integral part of American life. In 32 of the past 35 years, in time of war and in time of peace, men and women who have served in the country's Armed Forces have qualified for VA educational benefits. Over 16 million people have received some form of training as a result of the benefits provided by the GI bill. Currently, GI bill benefits constitute one of the Federal Govern- ment's largest postsecondarv education assistance programs. During fiscal year 1976. over $5.7 billion in GI bill moneys were expended and over 3.3 million veterans were enrolled in some form of training. As a result of the extent to which this program has beQome interwoven 60 PAGENO="0671" 3291 into the American life, the Committee has carefully examined the pro- posals which would terminate eligibility of prospective entrants into the Armed Forces for the GI educational program. The Committee, while examining the implications and ramifications of termination, has proceeded cautiously and thoroughly considered with care the advisability of providing an alternative program of educational bene- fits for future entrants into the Armed Forces. It is apparent to the Committee that the Nation needs to provide some form of readjustment assistance for those who serve and those who will serve in the Armed Forces. In this connection, testimony presented by represenatives of the Veterans' Administration before the Committee in 1974 is pertinent. In response to a Committee mem- ber's question concerning the need for a GI bill in the "all-volunteer era", the VA officially responded for the record that: The purpose of the GI bill is to continue to provide benefits for those under the all-volunteer army serving on active duty in order to aid them in adjusting to civilian life. As long as there is a need for active-duty personnel there is a need for readjustment benefits. Indeed, the VA's testimony, in this regard, is thoroughly consist- ent with the stated purposes of the current GI bill program under chapter 34 and the expressed purposes of the new GI bill program created in chapter 32. Those purposes for chapter 34 are set forth as follows: § 1651. Purpose The Congress of the United States hereby declares that the education program created by this chapter is for the purpose of (1) enhancing and making more attractive service in the Armed Forces of the United States, (2) extending the benefits of a higher education to qualified and deserving young `persons who might not otherwise be able to afford such an education, (3) providing voca- tional readjustment and restoring lost educational opportunities to those service men and women whose careers have been inter- rupted or impeded by reason of active duty after January 31, 1955, and (4) aiding such persons in attaining the vocational and educa- tional status which they might normally have aspired to and ob- tained had they not served their country. The Committee believes that most of those purposes are applicable to those entering the service today and believes that the.benefits, which will be provided by chapter 32, will facilitate the transition from mili- tary to civilian life that each service person must ultimately make. As noted by M. Kent Jennings and Gregory B. Markus in their work entitled "The Effect of Military Service on Political Attitudes," `"~ * * the military years typically, represent an interlude, a short-term deyia- tion from preferred alternatives, an experience which is typically not seen as a means to personal goals." As indicated by the continued high 61 PAGENO="0672" 3292 unemployment rates of younger Vietnam era veterans (aged 20-24), readjustment to civilian life after release or discharge from active service remains problematic. For comparative purposes, the applicabil- ity of citing the current unemployment difficulties facing young Viet- nam era veterans is substantiated by the Department of Defense's recent estimate that the average age of enlistees upon completion of the initial enlistment is approximately 22 years old. Thus, most first-term enlistees emerge from the service in their early 20's; most joined the service shortly or within 1 year after high school graduation and many never held a full-time position prior to service. Recent testimony by the Assistant Secretary of Labor for Employ- ment and Training before the Subcommittee on Readjustment, Edu- cation, and Employment revealed to the Committee that "the prob- lem of transition from military to work continues to be one that w~ (the Department of Labor) have got to work on." Subsequent written testimony submitted by the Department indi- cated that "the jobless rates for a sample of 20-24-year-old veterans was over 60 percent during the first week after discharge and did not fall below 10 percent (this was in 1974; by 1976 the percentage below which unemployment would not fall, was 20 percent), until about 1 year after separation from the armed services." The Depart- ment's testimony further revealed that "many younger vets did not have the opportunity to get into the civilian job market prior to induc- tion into military service. As a result, the market behavior of many 20-24-year-old veterans was more closely related to 18-19-year-OldS than to 20-24-year-old nonveterans * * ~." This would appear to the Committee to be a clear indication that those who serve in the All- Volunteer Force will probably "fall behind" similarly aged non- service personnel and that societal si~p$ should be taken to counter- balance any such detrimental effect. The Committee also concludes that the Veterans' Administration should continue as the agency responsible for aiding veterans in their readjustment to civilian life. No other agency or department has the expertise, inclination, or legislative mandate to assist those who have served the country. The Committee agrees with VA's assessment that "as long as there is a need for active-duty personnel, there is a need for readjustment benefits". And certainly as long as there is a need for readjustment benefits, there is another need for the VA. There can be little doubt that whatever its deficiencies and problems no other Fed- eral agency is better equipped to administer the chapter 32 program of readjustment benefits. Another important factor contributing to the Committee's deter- mination to provide an alternative to the termination of the GI bill is its desire to continue to assist deserving young men and women in obtaining an education they might not otherwise be able to afford. The Committee is of the opinion that service in the Armed Forces should be a function supported by young people~ from all segments of the society. Widespread citizen participation in the Armed Forces is in- 62 PAGENO="0673" 3293 herently a societal good and those who perform the task should be assisted particularly in their readjustment to civilian careers. Termi- nation of the current GI bill, without providing a suitable alterna- tive-such as chapter 32 contributory vesting program-would im- pede the upward mobility of our Nation's minorities and disadvan- taged. Preliminary findings of a study currently being conducted by the Department of Labor concerning utilization of GI educational benefits, indicates that minority groups use the GI educational pro- gram in proportionately greater numbers than nonminority veterans. Minority veterans also seem to have greater readjustment difficulties than nonminority veterans. For example, unemployment rates for younger black Vietnam era veterans have consistently been around 30 percent-nearly twice as high as similarly aged black nonveterans and half again as high as similarly aged white veterans. In a recent letter to the Committee, the American Council on Education wrote that "over the last 3 decades the GI bill has been one of the most significant factors in extending educational oppor- tunities and advancing career prospects for disadvantaged and minor- ity citizens. Many of the 15 million people who have received GI bill benefits would not otherwise have had the opportunity to pursue meaningful and rewarding careers. The termination of GI benefits without offsetting actions would clearly have a restrictive effect on opportunities in America." The increasing numbers of disadvantaged youths who are cur- rently enlisting for active duty in the Armed Forces further substan- tiates the need for the chapter 32 educational benefits program to assist deserving young men and women in obtaining an education they might not otherwise have been able to afford. The number of black individuals (many of whom are disadvantaged) as a percentage of enlisted accessions in the respective services is as follows: TABLE 16.-BLACKS, AS A PERCENTAGE OF ENLISTED ACCESSIONS IFiscal yearsj 1971 1972 1973 1974 let half 1974 1975 Army 13 15 19 27 29 26 Navy Martne Corps 9 13 13 18 11 19 11 21 10 21 13 21 Air Force 15 13 14 16 16 17 DOD 13 14 16 21 21 20 Professors Charles Moskos and Morris Janowitz of Northwestern University and the University of Chicago, respectively, recently wrote that "Reliance on marketplace forces [for attracting youth into the Armed Forces] results in an overconcentration of youth from lower socioeducational levels and racial minorities in the combat arms and in menial positions and a concomitant underrepresentation of these 63 78-226 0 - 77 - 43 (Pt. 4) PAGENO="0674" 3294 groups in skilled and technical position". As an example of the con- centration of minority groups in combat arms, the percentage of black enlisted persons within major occupational groups is as follows: TABLE 17.-PERCENTAGE OF BLACK ENLISTED PERSONS WITHIN MAJOR OCCUPATIONAL GROUPS [Fiscal yearsj Occupational group Percentag e of total occup ational group 1964 1970 1974 1975 Infantry, gun crews and allied specialists1 Electronics equipment specialists Communications and intelligence specialists Medical and dental specialists Other technical and allied specialists2 Administrative specialists and clerks Electrical/mechanical equipment repairmen Craftsmen Service and supply handlers Miscellaneous others 16.4 5.6 6.7 12.0 7. 1 10. 4 7. 2 9.7 17. 1 6. 2 15.2 5. 0 6. 3 10. 3 6. 4 11. 2 7. 4 8.6 17. 3 11. 6 19.3 6. 0 9. 6 14. 3 8. 9 17. 4 11. 2 12.9 21. 1 16. 4 21.1 6. 7 12. 3 14. 4 10. 2 20. 2 12. 1 13.1 21. 4 15. 8 I Total active DOD less Air Force. 2 Includes photography, drafting, surveying, mapping, weather, music, etc. Source: See table V-3. Soldiers who serve in combat arms often leave the military without having developed any technical skills readily adaptable to civilian occupations. The Committee believes that the new chapter 32 program, especially when contrasted with proposals for termination of the entire education benefits program, will enhance the opportunities for young men and women to obt~dn an education. As the Committee examined the future of the GI bill, it was most concerned with the effect of termination upon the ability of the mili- tary to recruit and retain qualified young men and women. The Com- mittee expects that the chapter 32 program will be used by the Armed Forces to promote and assist them in attracting qualified men and women to the Armed Forces. The Committee recognizes that the GI. bill, although originally devised as a readjustment program, has been successfully utilized as a recruiting incentive. For example, the Defense Manpower Commis- sion's report to the President and the Congress in April 1976, stated that "The GI bill probably was a major reason for the relative recruit- ing success in the active forces during 1974 and 1975." The Committee is also aware that prospective termination ~f this educational program without providing a suitable alternative could hamper the military's ability to attract and recniit qualified women. The annual Defense Department report, submitted to Congress in January of 1976, by Secretary of Defense Donald Rumsfeld, stated that "~e * * the prospective loss of 01 bill educational beve fits for new enlistees (are) expected to have an adverse im~vaet on our ability to recruit high noten~iai ~-nersonnei * * n'." Army recruiting command- ing general, Maj. Gen. Eugene P. Forrester, provided additional evi- dence when he stated that the educational benefits provided by the GI bill are needed by the services to attract "quality prosnective recruits." In a speech before a group of civilians in May of this year, General Forrester forthrightly acknowledged that the pending loss of the GI bill education program would~hurt Teçruiting. Elimination of the 64 PAGENO="0675" 3295 education program "would be a serious blow to recruiting and would have (a) particularly adverse effect on quality," the general declared. Recent studies substantiate Rumsfeld's and Forrester's prediction in regard to the ability of the services to attract quality recruits in the event of termination of eligibility for GI bill entitlement. For ex- ample, one recent study found that termination of the GI bill would cut quality recruitment by 15 percent; another indicated that termi- nation could cause a decrement of up to 22 percent in the number of high school graduates who would be recruited into the Armed Forces. Whatever the decline, the Armed Forces can ill afford to lose the op- portunity to recruit large numbers of high school graduates especially at this stage in the development of the All Volunteer Force. The avail- able pooi in the 18-year-old, male population is small enough as evidenced by the following chart: CHART 4.-COMPosmow OF THE 18-YEAR-OLD MALE POPULATION, FISCAL YEARS 1972-85 18 YEAR-OLD MALES (Thousands) 2200 - TOTAL 18 YEAR-OLD MALES :~::: 1,600 CONTINUING STUDENTS 1.400 - 1,200 - TOTAL 1.000 800 - I UNENROLLED, EMPLOYED 600- SLOW GROWTH 400 - -a-- MODE RATE GROWTH 200 I AVAILABLE POOL \RAPID GROWTH FY 1972 73 74 75 76 77 78 79 80 81 82 83 84 85 A recent analysis, entitled "Educational Benefits and the All. Volun- teer Force," by two preeminent military sociologists, Moskos and Janowitz, reported that "[A]pproximateiy 15 percent of high school accessions into the enlisted ranks of the All Volunteer Force will be depleted if the GI bill were to be terminated. GI bill termination would most affect recruitment into the ground forces * * ~." The two mili- tary sociology experts concluded from their study that "highly quali- fied youth are potential service entrants, providing educational bene- fits are offered and a short-term enlistment is available." These conclusions are amply supported by a report prepared by the Brookings Institution entitled the "All Volunteer Armed Forces, Progress, Problems and Prospects." Submitted to the Senate Commit- tee on Armed Services in June 1973, the report indicated that "data suggest that for a large number of potential enlistees, a paid school -65 PAGENO="0676" 3296 option might well have greater appeal than high pay. Moreover, recruits attracted by educational incentives would enhance the overall quality of the All \? olunteer Force." Additional support concerning the value of educational benefits in attracting recruits is found in the book "How to End the Draft", co- authored by Senator Robert Stafford, ranking minority member of the Subcommittee on Readjustment, Education, and Employment. On page 68 of the analysis of the future of the all-volunteer force, the authors state ". . . one valuable fact emerged from the Defense De- partment's survey of non-veterans between the ages of 16 and 25, when they were asked to choose the single reform that would be most likely to duce them to volunteer for military service in the absence of the draft. The fact is that educational opportunity may be as iimportant, if not more important, an inducement to voluntary enlietmen than pay scales . . . ". [Emphasis supplied.] A report authored by Jerald Bachman, and Jerome Johnston of the Institute of Social Research (TSR) of the University of Michigan, similarly concluded that paid schooling attracts quality recruits and, in turn, benefits overall society. In 1972, "Young Men and Military Service", a study prepared as a series of monographs in regard to "i outh in Transition", examined numerous enlistment incentives. Respondents were asked to rate the attractiveness of 11 different enlistment incentives (the questionnaire assumed that the Vietnam war had ended and the draft had been eliminated). Bach- man and Johnston noted ~ * * we were singularly impressed by one finding * * * one incentive stands out above all others: The Govern- ment agrees to pay for up to 4 years of college * * * in return for 4 years of active duty. This was selected by a margin of 4 to 1 over the second ranked incentive * * ~`, Recently, Bachman and John Blair examined the various enlist- ment incentives in order to determine the effect that termination of GI educational benefits would have on the "ideological balance" of the Armed Forces. The research was premised in the authors' belief that a large standing national force, not subject to civilian influence, could be detrimental to the future of the democratic process. Such a premise is not without precedent. Speaking as Publius in the Federal Papers, Alexander Hamilton devoted Federalist Papers 8, 24,26, and 29 to the relationship of Armed Forces (including State militia) to the proposed new Federal Government. In paper No. 29, Hamilton argues that the National Government's access to the mihtia will "lessen the call formilitary establishments * * ~". Hamilton points out that one benefit of using State militia is the injection of a civilian influence on the military; ~~`k * * But if circumstances at any time oblige the Government to form an army of any magnitude that army can never be formidable while there is a large body of citizens * * * who stand ready to defend their own rights and those of their fellow citizens. This ~appears to me the only substitute that can be devised for a standing Army and the best possible security against it if it should exist." Although Hamilton's argument for civilian in- fluence was a defense of the power of the Union to call up the States' militia and, as such may no longer be applicable~ the thrust of the argument-the need for a civilian influence upon the military-is, by all means, pertinent. 6 PAGENO="0677" 3297 In testimony before the Manpower Subcommittee of the Senate Armed Services Committee in February of 1976, the Assistant Secre- tary of Defense for Manpower and Reserve Affairs addressed the problem of a "separatist military". The Secretary stated: T would consider an increasing trend toward a separatist military to be a problem if the military services, especially the Army, are not recognized, respected and supported as an Amercian institution by the vast majority of our citizens. To allow the Army to become isolated from the public for which it dedicated to serve, I believe, would be detrimental to our national interest. Bachman and Blair found evidence to support the Assistant Secre- tary's statement and have concluded that- By attracting a wide cross-section of citizens into its Armed Forces for relatively short terms of duty, the Nation can be assured of having an able military that is responsible and responsive to civilian interest. * * * Although the President and Congress may hope to save money by reducing some of the funds available for GI educational programs, they will be doing so at the dangerous expense of this important enlist- ment incentive which helps to ensure the ideological balance of the all-volunteer military. As a result of their research, Bachman and Blair found that "young men attracted [to the military] by the promise of paid schooling were slightly more intelligent, showing greater ability and leadership poten- tial". In summary, they determined that educational benefits are one of the most attractive incentives to prospective young enlistees. The Committee believes that terminating the GI bill, without pro- viding an alternative postservice educational benefits program, would impair the military's ability to attract sufficient numbers of quality recruits. The Committee is aware of the difficulties that the military-particu- larly the ground forces-has had in attracting sufficient numbers of quality recruits. In fact, a General Accounting Office study of Febru- ary 27. 1976, entitled "An Assessment of All-Volunteer Force Re- cruits," reported that it had "found evidence that Defense may over- state quality in its reports." This finding caused increased Committee interest in providing a postservice educational program that could be used by the military as a recruiting incentive for quality personnel. The importance of recruiting quality personnel was emphasized by the Department of Army's Assistant Secretary for Manpower and Reserve Affairs in recent testimony before the Subcommittee on Man- power and Personnel of the Senate Committee on Armed Services. The Assistant Secretary testified:. I would like to spend a moment explaining why the quality of recruits is so important. The key is simple. High-quality recruits make better soldiers. They are less likely to be dis- charged during their initial enlistment for trainability, motivational, or disciplinary reasons. This limits the turn- 67 PAGENO="0678" 3298 over of personnel and minimizes training and replacement costs. It contributes positively to readiness and esprit and promotes the image of the Army as a desirable place to serve. I might digress a moment to say that the Army's effort to recruit high-quality personnel reminds me of a television commercial for a popular automobile accessory, in which a service station manager says "you can pay me now or you can pay me later." Recruiting high-quality personnel follows that adage. We pay with the resources and effort which at- tract high-quality personnel now or we pay significantly higher costs later for added separations and replacements and in lower unit readiness. The Committee concludes that terminating the GI bill, without providing a suitable alternative, would make more difficult the mili- tary's task of recruiting the quality personnel needed to fill the ranks of the All-Voluntary Force. The Committee is aware that hear- ings before the Senate Armed Services Committee last February dis- closed that the services are having recruiting problems. For example, testimony revealed that the Army will "fall short of * * * quality objectives during 1976." A representative of the Navy testified that "5 of the last 6 months the Navy has barely met or fell short of its recruiting goals * * * J do not know that we can continue to attract the quality that we need especially if the economy continues to im- prove." Representatives of the Marine Corps testified before the Man- power Subcommittee of the Senate Armed Services Committee that "any further reduction in recruiting assets ~e.g., the GI bill] in fiscal year 1977 would further jeopardize our goals of improving quality, reducing discinlinary problems, and increasing the readiness of the corps." The Committee also noted, with interest, the survey of new recruits which the Air Force recently conducted. Entitled "Basic Airmen's Values and Perceptions of Society-1976," the study re- vealed that recruits have an "increased desire for education with 71 percent listing it as an important reason for enlisting." In contemplating the advisability of terminating the GI bill, the Committee also sought background from the academic community. The Committee was influenced by the following findings of Professors Moskos and .Janowitz: (1~) Since the end of the draft upward of a third of Army and Marine Corps male accessions do not possess a civilian high school diploma. This is well over double the proportion of non-high-school graduates in the populaiton at large for the relevant age group. (2) A staggering number of new accessions in the ground forces do not serve their full enlistment. The loss rate in the Army for fiscal year 1974 anproached 40percent. (3) All data dramatically and consistently show that serv- ice personnel with high school diplomas-compared to non- high-school graduates-are much more likely to complete their enlistments, have fewer disciplinary problems, and be more effective in job performance. In point of fact, high 68 PAGENO="0679" 3299 school graduation is a better predicathr of soldierly success than mental group level. This is true regardless of racial background. (4) Army recruitment figures for 1973-74 (when such a policy was in effect) show that short terms of enlistment- 2 years of active duty-were most attractive to high school graduates. Qualitative evidence indicates the large majority of these 2-year enlistments were college-bound youth. (5) GI bill seekers view education in academic, not voca- tional terms. The Committee believes that the chapter 32 program will aid the services in recruiting. In regard to this contributory vesting program, Moskos and Janowitz wrote "A desirable feature in such an arrange- ment would be a system in which contributions by service personnel would be matched by funds paid by the Veterans' Administration." The Committee stresses that continuation of the educational benefits program under chapter 32 is not principally a function of its desire to provide the services with a proven recruiting incentive. The Com- mittee believes that adoption of the chapter 32 educational program, as an alternative to termination of the current GI bill, will be an important and necessary societal asset in easing the transitional prob- lems which frequently occur upon termination of one's military serv- ice. In addition to the individual men and women who will need assistance, the Nation as a whole will benefit from this increased education and training. For example, The American Council on Education, in a written statement submitted to the Committee, although urging that the present program be retained said, "If it is the will of Congress that the program (GI bill) be modified at the present time, however, the new program which would be established by your amendment (Amend. No. 2005) to S. 969 seems to offer a constructive way to help meet the needs of servicemen and veterans, as well as the military." The Paralyzed Veterans of America (PVA) in a statement pre- sented by Larry Roffee, their legislative director, testified that "We believe the advantages which accrue to the individual veteran, in terms of increased opportunities, higher income, and greater self-esteem from postsecondary education or training alone, merit the continua- tion of a GI bill. We also believe advantages accrue to society as a whole from the veterans having increased education levels * * ~. It is also the PVA's position that the current education entitlements * * * must be viewed as readjustment benefits * * ~. PVA feels the Post- Vietnam Era Veterans' tAssistance Act * * * is a very imaginative and feasible program to insure th~ continuation of education and training benefits for future veterans * * ~. The proposed program has PVA's wholehearted endorsement." The American Legion testified that they suDnorted a strong na- tional defense and a pro~ram of attracting oualified men and women into our Armed Forces-both of which would be aided by an educa- tional assistance program designed to stimulate enlistments in the Armed Forces. The National Association of Concerned Veterans (NACV) called the new.chapter 32 program "a fine piece of legislation." Noting that 69 PAGENO="0680" 3300 the "01 bill is an investment, not a `give-away' program," NACV testified that it had "long been the position of NACV to continue the 01 bill." The American Veterans of World War II, Korea, and Vietnam, (AMVETS) in a letter to Chairman Hartke, stated: As per the mandate of our 32d National Convention held recently in Philadelphia, AMVETS is in full concurrence with chapter 32-The Post-Vietnam Era Veterans' Read- justment Assistance Act. This new innovative direction brings about a well-defined distinction between wartime and peacetime benefits. The fact that the peacetime serviceman must contributh toward his future education further adds to that distinction. Thus, AMVETS favors this alternative to discontinuing the 01 bill as we have previously known it. Since AMVETS has historically supported education and training for war- time veterans as sacred, we strongly support section 407 of title IV which provides that in the event universal military training is reimposed by law that those answering military service after the effective date of such a change shall be eligi- ble for chapter 34 educational benefits. The chapter 32 program, adopted as the alternative to the termina- tion of the 01 bill, is similar in nature to an "educational pension plan". Were it not for postservice educational benefits, an individual who serves only one tour of duty (a citizen soldier) would leave the service without the assistance of any program designed to aid him readjust. According to data furnished to the Committee, only 12.7 percent of those in grade E-1, 13.0 percent of those in grade E-2, and 15.2 percent of those in grade E-3 can be expected to retire from the military. The vast majority will not receive any form of pension cur- rently authorized for individuals who have served 20 years. Thus, the Committee structured the new program in the form of a contributory educational "pension plan." Contributions of $50 to $75 a month are required in order to be eligible for VA matching funds. The Committee believes that the amount that each participant is required to make each month is reasonable. In this regard, the follow- ing table shows selected examples of annual compensation and bene- fits for military personnel: 70 PAGENO="0681" -J z 0 C,) 0~ >- 0 0 0 C/) 0~ 0 C-) 0 C/) 0~ >< 0 C.) C,, w -J 3301 - ((~ LC)(C U~00 ~C0 00U~ ~ C)(fl C..(01..lfl 05 ,.~ 05 (C 000000 CO~0 - 0CC CC) 00 N- 050 CO CL) ~ ~ C) C)~~j C) CO 0 E E C-) 4, r-.r-.r-.w 0(1505(0 C)CO900..l..(1or..(0 ~ (C (005 ~ - C'JNJ15J CO COCOCOC~J CO 15) CO COCO COCOCO 154 000 .0 CL o~ ~ 154154 ~ - v V V 0. ~. 71 PAGENO="0682" 3302 Also valuable to the Committee in its deliberations was the follow- ing table comparing military and civilian compensation and benefits prepared by the Senate Committee on Appropriations: TABLE 19.-COMPARISON OF MILITARY AND CIVILIAN COMPENSATION AND BENEFITS (OCT. 1,1975, PAY SCALES) Comparable civilian Military grade grade Military ad- Military Civilian vantage (+) compensation compensation or dis- and benefits and benefits advantage (--) 0-9/0-10 0-8 GS-18 0-7 GS-17/GS-16 0-6 GS-15 0-5 GS-14/GS-13 0-4 GS-12 0-3 GS-11IGS-10 O-2/W-4/W-3 GS-9/GS-8 O-1/W-2/W-1 GS-7 E-9/E-8/E-7 GS-6 E-6/E-5 GS-5 E-4 GS-4 E-3/E--2/E-1 GS-3/GS-2/GS-1 $54, 713 54, 815 $41, 350 $13, 465 48, 886 41, 350 +7, 536 43, 305 38, 849 +4, 456 35, 101 31, 131 +3, 970 28, 188 24, 485 +3, 703 24, 004 19, 749 +4,255 21, 729 16, 403 +5, 326 16,914 14, 170 +2,744 20, 964 12, 813 +8, 151 14, 711 11, 551 +3, 160 9,915 10, 375 -460 7, 821 8, 326 --505 I Where more than 1 civilian or military grade is shown, the amount for compensation and benefits is the average of the values shown on tables 2 and 3 for those grades. As is readily observable, wages and benefits for those in the lower military grades (E-1, E-2, and E-3) are roughly comparable to the wages and benefits of those in the lower Government service grades (GS-1, GS-2, and GS-3). Rates for lower ranking enlisted person- nel average about $7,821 a year. Thus, an E-3 or below, who con- tributes the maximum of $75 monthly ($900 a year) would be con- tributing approximately 11.5 percent of total salary. A soldier who contributes $600 a year would be contributing 7.6 percent of his total wage. Although the required monthly contribution may impose a slight hardship on some, the Committee believes that the benefits which will accrue from participating will outweigh whatever mod- erate financial sacrifice may be required. Further, and as a footnote, on the ability of prospective entrants to participate, the Committee notes that the Department of Defense reports that more than 89 percent of those currently entering the armed services have no dependents. The committee also recognizes that postservice educational benefits have been utilized by the Armed Forces to attract young men and women into the military. Educational opportunities are a major at- traction for quality accessions. To assure that the chapter 32 program (devised by the Committee to assist in the readjustment of activeforce volunteers) could be effectively used by the services to continue attract- ing quality accessions, the Committee has included several provisions to accord with the recent recommendations of the Defense Manpower Commission. Under the program, the Secretary of Defense is au- thorized to contribute to the fund of any participant such contribu- tions as is deemed necessary to encourage persons to enter and remain in the Armed Forces. Thus, in consonance with the Defense Manpower Commission recommendations, it is possible to utilize the program as a "recruiting management tool * * * with benefits granted only on a selective basis to help meet critical skill needs." 72 PAGENO="0683" 3303 The educational program adopted by the Committee will also assist the armed services in inducing quality personnel to remain in the service by authorizing that the benefits can be utilized by service per- sonnel in their second or subsequent enlistment. In testimony before the Committee, representatives of the Department of Defense testified that; the Army, to maintain desired levels of manpower, requires "one out of four [first-term recruits] to reenlist." Currently, sufficient num- bers of service personnel are reenlisting. As indicated by these figures, the services expect and need a continuing turnover in personnel, a turnover which would also be assured by the chapter 32 program. As explained in testimony before Congress this year, the services "need a balance between youth, stamina, and physical ability on one hand and experience and knowledge on the other." Further, administration rep- resentatives testified that in order to retain quality personnel in the military, "there must be an opportunity for advancement. Increasing the career content would result in fewer promotions." The Committee also observes, however, that by allowing educational benefits to be used in the second or subsequent enlistment and by authorizing the Secretary to contribute to the fund, such moneys as the Secretary deems appropriate to induce personnel to remain in the service, the chapter 32 program will also significantly aid career reten- tion efforts. Thus, after much examination, the Committee recommends and adopts the new chapter 32 program. There is now, and shall continue to be, a need to aid men and women who have served in society's armed forces in readjusting after honorably concluding that service. The chapter 32 program will provide this assistance. There continues a need to provide within the society a program, such as the GI bill, to assist upward mobility. Currently, disproportionate numbers of socioeducational disadvantaged youths are entering the service. The chapter 32 program will provide such a program. There is also a need to provide educational assistance as an inducement fo join the Armed Forces. Chapter 32 provides such an inducement. COST ESTIMATES In accordance with seetion ~52 (a) of the Legislative Reorganization Act of 1970 (Public Law 91-510, 91st Congress), the Committee, based on information supplied by the Congressional Budget Office and the Veterans' Administration, estimates that the costs attributable to this bill, S. 969, as amended, are approximately $472.9 million (consisting of $495.4 million in outlays less $22.5 million in receipts resulting from title IV) in fiscal year 1977 decreasing to $68.6 million (consist.ing of $661.3 million in outlays less $398.7 million in savings from termination of the current GI bill and less ~194 million iii receipts resulting from title IV) in 1981, all as shown in the following table: 73 PAGENO="0684" 3304 TABLE 2-FIVE-YEAR COST OF S. 969, AS AMENDED [In millions of dollars; fiscal yearsj 1977 1978 1979 1980 1981 Title I- Budget authority 6.3 6. 1 6.0 5.8 5.6 Outlays 6.3 6. 1 6.0 5.8 5.6 Title II- Budget authority 376. 5 344. 5 324. 5 303.3 282. 1 Outlays 376.5 344.5 324.5 303.3 282. 1 Title Ill- Budget authority 26.0 25.8 25. 6 25. 3 25.3 Outlays 26.0 25.8 25.6 25.3 25.3 Title IV- Budget authority 22.5 69. 1 100. 5 3.3 -204. 7 Outlays 1. 1 -. 5 -7.2 -20.2 -117. 0 Receipts -22. 5 -71.6 -134.2 -165.4 -194. 0 Title V- Budget authority 85.2 78.9 74.6 70. 5 66.2 Outlays 85.2 78.9 74.6 70. 5 66.2 Title VI- Budget authority .3 .3 .3 .4 .4 Outlays .3 .3 .3 .4 Total: Budget authority 516.8 524. 7 531. 5 048.6 174.9 Outlays 495.4 455. 1 423.8 385. 1 262.6 Receipts -22.5 -71.6 -134.2 -165.4 -194. 9 The full text of reports of the Congressional Budget Office can be found in "Agency Reports", infra. TABULATION OP VOTES CAST IN COMMITrEE Pursuant to section 133(b) of the Legislative Reorganization Act of 1946, as amended, the following is a tabulation of votes cast in person or by proxy of the Members of the Committee on Veterans' Affairs on a motion to report S. 969, with amendments, favorably to the Senate: Yeas-9 Vance Hartke Clifford P. Hansen Herman E. Talmadge Strom Thurmond Jennings Randolph Robert T. Stafford Alan Cranston Richard (Dick) Stone John A. Durkin Nays-0 Prior to this vote an amendment offered by Senator Durkin to strike sections 404 to 407 inclusive was defeated by voice vote. Amendments to extend the delimiting the period for 3 years and to permit "accelera- tion" of benefits were both withdrawn without prejudice by their sponsor, Senator Durkin. SECTION-BY-SECTION ANALYSIS AND EXPLANATION OP S. 959, AS AMENDED Section 1 This section provides that the proposed act may be cited as the "Vet- erans' Education and Employment Assistance Act of 1976". -Wi- PAGENO="0685" 3305 TITLE I--CHAPTER 31 DISABLED VETERANS' VOCA.. TIONAL REHABILITATION RATE AND "PROGRAM ADJUSTMENTS Section 101 This section amends chapter 31 of title 38, United States Code, by increasing the monthly subsistence allowance payable to disabled vet- erans in training under that chapter. Chapter 31 authorizes vocational rehabilitation training for disabled veterans. In addition to the monthly subsistence allowance provided by chapter 31, disabled vet- erans training under chapter 31 also have full tuition, books and supplies paid by the Veteran's Administration. Section 1504(b) is amended to provide an 8 percent increase in the monthly subsistence allowance rates for chapter 31 trainees. Under the bill as amended, the full time institutional rate for a veteran with no dependents would be increased from $209 to $226 a month. For a veteran with one dependent the monthly subsistence rate would be increased from $259 to $280; with two dependents the rate is increased from $304 to $329; and $24 would be added for each dependent in excess of two. The Veterans' Administration and the Congressional Budget Office estimate that approximately 28,500 veterans will train under chapter 31 resulting in additional costs in the first year of $4.7 million decreasing at the end of 5 years to 26,900 veterans in training at a cost of $4.5 million. Section 102 This section amends section 1503(c) of title 38, United States Code, to repeal the existing limitation on use of vocational rehabilitation eligibility contained in chapter 31 for the training of seriously dis- abled veterans. In lieu of a definite termination date, this section pro- vides the Administrator discretionary authority to extend entitlement to a veteran for such time period as is necessary based upon the vet- erans' disability and need for vocational rehabilitation. Section 1503 (a) currently provides (subject to the exceptions contained in 1503 (b) and (c)) that the normal period of eligibility under chapter 31 is 9 years from the disabled veteran's discharge or release. Section 1503 (b) authorizes an additional 4-year eligibility period if the disabled vet- eran was prevented from entering (or having entered, from complet- ing) vocational rehabilitation either because of medical problems or because eligibility for such benefits had not been timely established within that period. Finally, section 1503 (c) authorizes an additional training period for certain disabled veterans in need of vocational rehabilitation to overcome the handicap of blindness or other serious service-connected disabilities. Tinder this subsection, additional periods of eligibility may be granted for a period not to exceed the later of 10 years beyond the termination date or June 30, 1975. The ,June 30, 1975 date applied primarily to blinded and seriously disabled veterans of World War II and the Korean conflict. As a result of the termination date on June 30, 1975, a number of seriously disabled veterans then in training under 1 75 PAGENO="0686" 3306 chapter 31 were cut off from Veterans' Administration benefits before they had completed the vocational rehabilitation needed to regain their employability as shown in the following table: TABLE 21.-VETERANS WHOSE VA VOCATIONAL REHABILITATION WAS TERMINATED JUNE 30, 1975, BY SERVICE PERIOD AND DEGREE OF DISABILITY Disability rating 10 to 20 30 to 40 50 to 60 7 0 to 90 100 Total World War II Korean conflict 0 0 25 18 63 39 42 23 89 49 219 129 Total 0 43 102 65 138 348 In addition, seriously disabled veterans who have not yet entered training but will need training in the years ahead, such as those whose disabilities have prevented them from entering training and those whose service-connected conditions have worsened~ are affected by the current 10-year termination date. Consequently, the amendment con- tained in this section repeals any termination date; instead the Admin- istrator is authorized to provide such seriously disabled veterans vocational rehabilitation benefits under chapter 31 whenever it is necessary to aid them in regaining employability. Generally, the determination as to whether a veteran is "seriously disabled" (and hence eligible on that basis for extension of entitle- ment for vocational rehabilitation) is made on the basis of the severity of the veteran's service-connected disability, as evidenced by its sched- ular rating, and the effect of the disability on the veteran's employ- ability. Blinded veterans and other veterans with disabilities with schedular rating of 100 percent are by regulation, however, automatically defined as seriously disabled for the purposes of section 1503(c) (see 38 CFR 21.701). Determination as to need for vocational rehabilitation train- ing is made in counseling on the basis of whether the veteran is em- ployed or employable in a suitable occupation. The Committee expressly intends that this standard of determination be applied to all disabled veterans applying for chapter 31 benefits. As table 21 indicates, a disability of 30 percent or greater is gener- ally required to bring the provisions of subsection (c.) into operation. Further, 87 percent of those veterans training pursuant to section 1503 (c) who were terminated as of ,Ji~ine 30, 1975, had disability ratings of 50 percent or greater. Consistent with previous practice the Com- mittee exj~ects the Veterans' Administration to exercise great liberality in granting the requests for extension of any disabled veteran rated 50 percent or greater. In sum, the Committee believes that without this amendment there would be many situations in which vocational rehabilitation benefits would be denied to seriously disabled veterans who could benefit sub- stantially from such as&stance. The Veterans' Administr~ition and the Congressional Budget Office estimate that 475 veterans will be affected in the first year at a cost of $1.6 million decreasing gradually to 375 veterans at a cost of $1.3 million in the fifth year, all as shown in the following table: 76 PAGENO="0687" 3307 TABLE 22.-CHAPTER 31-EXTENSiON OF DELIMITING DATE Fiscal year - Trainees Direct benefits cost 1977 1978 475 $1.6 1979 450 1.6 1980 425 1.5 1981 400 1.4 1.3 Total The Veterans' Administration supports this provision which it states will permit it "to aid these deserving veterans in regaining employability". Section 103 This section amends chapter 31 of title 38, United States Code, by providing specific authority in section 1511 for the utilization of Fed- eral agencies to provide training and work experience for certain disabled veterans on an uncompensated basis when this training would aid them in their rehabilitation. Under current authority, disabled veterans may enter into on-job training in programs of Federal agencies. They are employees of the agency and, as such, receive the same wages and benefits as other employees, with supplementary assistance under chapter 31. Upon successful completion of training, the veteran progresses to employ- ment in the objective for which the training has been provided. This has traditionally been regarded as the preferred and desirable method for providing training in Federal agencies. However, when on-job training opportunities are not available, or the veterans' condition temporarily preclude meeting the regular demands of on-the-job training, or the veteran falls short of qualifying for the trainee posi- tion, it may still be in the veteran's interest to receive training in a Federal agency, thereby preparing him most directly and efficiently for Federal employment. This amendment would grant the Administrator discretionary au- thority to utilize Federal agencies to provide unpaid training or work experience as the whole or part of an individual's vocational rehabili- tation program. While pursuing such training, the veteran would not be considered a Federal employee for the purposes of laws administered by the Civil Service Commission (for example, annual leave, sick leave, retirement, insurance, et cetera), but would be considered an em- ployee for the purposes of the benefits of chapter 81 of title 5, United States Code, relating to injuries on the job. Under the provisions of the Fair Labor Standards Act, chapter 31 trainees may not be utilized as unpaid employees. Congress, however, in enacting the Rehabilita- tion Act of 1973 (Pub. *Law 93-112~) permitted in section 501 (e) the utilization of state vocational trainees in Federal facilities on an unpaid basis. Under the change intended by this section, chapter 31 disabled veterans will now have available to them the same potential training facilities within Federal agencies now granted to state 77 PAGENO="0688" 3308 trainees (and coverage under the Federal Employee's Compensation Act), thus affording disabled veterans an increased opportunity for Federal employment. The Veterans' Administration, in its official re- port to the Committee, states that "we feel that severly disabled veterans in the chapter 31 program should be given the opportunity to prove they are competent employees without charge to the employ- ing agency, and therefore approve that part of section 103 which would exempt chapter 31 trainees for the purposes of laws adminis- tered by the Civil Service Commission". Disabled veterans successfully completing such training or work experience will become eligible for nó~icompetitive appointments to the Federal Service. The Committee expects to be periodically in- formed of the number of disabled veterans so appointed and the na- ture and grade level of the appointments by each Federal agency. This information may be included in an annual report; to Congress by the Civil Service Commission required by section 2014(e) of title 38, United States Code. The Committee intends that training and employment opportunities for disabled veterans, now barred by circumstances beyond their con- trol, will be afforded to them under this amendment. The Veterans' Administration reports that "any added cost of this provision would be minimal". Section 104 This section makes a number of technical amendments to chapter 31 to remove unwarranted and unnecessary gender references. The following sections are affected: 1503, 1504, 1505, 1507, 1508, 1509, 1510, and 1511. TITLE Il-VETERANS' EDUCATION RATE AND PROGRAM ADJUSTMENTS Section 201 This section provides an 8-percent increase in the educational assist- ance payable to veterans training under chapter 34. S Cla~se 1 amends section 1682(a) (1) to nrovide an 8 percent increase in the monthly educational assistance allowances. The full-time insti- tutional rate for a veteran with no dependents would be increased from $270 to $292 a month. The rate for a veteran with one dependent would be increased from $321 to $347 a month. The addition of a child would increase the rate from $366 to $396 a month, with an additional $24 a month for each dependent in excess of two. Three-quarter and half- time rates are also adjusted upward proportionately by an 8 percent rate. C7awse ~2 amends section 1682(b) relating to the pursuit of a pro- gram of education while on active duty or less than half-time basis by providing an 8 percent increase so that the maximum allowance shall be computed at the rate of the established charges for tuition or $292 per month for a full-time course (up from current $270) whichever is lesser. Clause 3 amends section 1682 (c) to provide an 8 percent increase in the monthly assistance rates payable to veterans pursuing a farm 78 PAGENO="0689" 3309 cooperative program. Full-time educational assistance rate for a vet- eran pursuing farm cooperative training with no dependents would be increased from $217 a month to $235 a month. The rate for a vet- eran with one dependent would be increased to $276 a month from the current rate of $255. The addition of a child would increase the rate from $289 a month to $313, with an additional $18 a month for each dependent in excess of two. Three-quarter and half-time training rates are also adjusted upward proportionately by an 8 percent rate. The following table shows participation under Farm Cooperative Training Programs during Vietnam era through April 1976. TABLE 23.-PARTICIPATION UNDER FARM COOPERATIVE TRAINING PROGRAMS DURING VIETNAM ERA THROUGH APRIL 1976 States Farm trainees Alabama Alaska Arizona Arkansas California Colorado_ Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minne~ota Missiscippi Missouri Mcntana States Farm trainees Nebraska Nevada New Hamsphire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Puerto Rico 2, 277 6 13 18 12 93 1, 720 781 78 1, 394 9 12 4 76 930 455 109 6 0 126 43 2 967 50 3 U.S. total 24, 653 Clauee 4 amends the maximum educational assistance rate payable under a PREP program under section 1696(b) from $270 per month for a full-time course to $292. The Veterans' Administration, which supports the 8 percent increase in rates, estimates that in the first year 2,445,100 v terans will receive the additional benefits at a cost of $329.2 million decreasing at the end of 5 years to 1,830,800 veterans and $247.4 million respectively. However, the Congressional Budget Office estimates that in fiscal year 1977, 2,547,500 veterans will be benefited by the 8 percent increase at a cost of $299 million. By 1981, CBO estimates that 1,907,700 will benefit at a cost of $223.9 million. 79 69 11 37 4, 385 280 59 8 4 7 943 37 9 14 168 1, 596 3, 257 172 82 85 6 23 12 29 1, 976 79 2, 094 27 78-226 0 - 77 - 44 (Pt.4) PAGENO="0690" 3310 Section 202 This section amends section 1652 of title 38 which defines the basic terms utilized in chapter 34. Added to section 1652 (for the pur- pose of both chapter 34 and chapter 36) are definitions of the terms "institution of higher learning" and "standard college degree". The Veterans' Administration, in reporting favorably on this section, noted that title 38 does not include these definitions and that: The result is a broad classification of institutions of `higher learning and standard college degree by Federal agencies administering educational programs to the detriment of veterans. Some institutions are granting their students a document they refer to as a "college degree," even though the document normally would not be recognized by graduate or professional schools. We believe that setting out a definition of "standard college degree" will eliminate many problems now faced by veterans as they venture into employment or future education. We believe that clarification of the `definition of what is an institution of higher learning would assist the Veterans' Administration in its relationships with institutions in the educational community. Both terms have been used by the Veterans' Administration for a considerable period of time and have well established meanings pur- suant to regulations issued by the Agency. The amendments made by the section are simply intended to codify existing regulations and practice. Identical definitions are provided for chapter 35 in section 302 of this Act infra. Section 203 Clawse 1 amends section 1661 (a) to permit those veterans entitled to 36 months (4 regular school years) of educational assistance an additional 9 months of assistance for pursuit of educational programs without limitation to baccalaureate degree to be pursued as currently set forth in law. This unrestricted, additional school year of entitlement is identical to provisions incorporated in S. 2784 which passed the Senate on June 19~ 1974 by a vote of 91 to 0. Adoption of an additional 9 months of eligibility, by the Senate in 1974, resulted from extensive hearings held before the Committee on Veterans' Affairs. Proponents of this extension, noting that World War II veterans could have received up to a maximum of 48 months of entitlement, argued for additional eligibility and repeatedly testified as to the difficulties of many veterans in obtaining an undergraduate degree in 36 months-that is, 4 standard college years of 9 months each. A survey by the National Association of Concerned Veterans of selected States indicated that `large numbers of veterans were not able to obtain an undergraduate degree in the standard 36 months of entitle- ment. They noted that the higher price of education, the loss of credits involved in transferring from one institution to another, and the `lack of adequate benefits in the (II bill heretofore, had all combined to make it very likely that many Vietnam era veterans would not be able to complete baccalaureate degree requirements within 4 school years. 80 PAGENO="0691" 3311 The relatively low level of benefits caused many veterans to devote excessive hours earning money to supplement their monthly benefit checks in their attempt to obtain an education under the GI bill. NACV pointed out in its testimony that 12 credit `hours per semester added up to 96 credit hours after 4 school years, or 24 credit hours short of 120 required for gradu:ation. Under the quarter system, the 4 years minimum requirement would accumulate only 144 credit hours or 3)6 short of the 180 necessary for graduation. Supportive data on the difficulty of obtaining degrees in 36 months was `also submitted by representatives of the American Association of Community and Junior Colleges, who testified that most veterans took a course load of only 12 hours for a semester with the result that it took many veterans an average of 5 years :to complete their degree. Given this background, these arguments were most persuasive to Com- mittee members and in adopting an additional 9 months of eligibility the Committee noted in its report accompanying S. 2784, that: Extension of entitlement must be provided to insure that veterans-taking reduced credit loans, forced to work and facing technical and administrative bottlenecks-will be able to complete their undergraduate degrees. At the same time, the Committee acknowledged that since the adop- tion of the first GI bill over 30 years ago, the American workforce had changed radically. Considering the exclusiveness of higher education after World War II, the GI bill then was very much a unanticipated. benefit but 30 years later it was very much a necessity. Noting that a major aspect of readjustment assistance is to make a veteran economi- cally competitive, the Committee report also noted that in 1950, 7.1 percent of those in the 25 to 29 age bracket in the Nation had baccalau- reate degrees, while in 1973, 19 percent had undergraduate degrees in the same age bracket. The Committee report quoted testimony that: The employment market today requires that, in many in- stances, the applicant to attain a higher than bachelor's level degree in order to compete with others. It is possible for an individual to graduate from college and enter the employ- ment market and not even qualify to fill out an employment form, much less compete for a job. The Committee report further noted a report by the Carnegie In- stitution of Higher Education, which Pointed out that educational requirements imposed by employers and State licensing agencies and professional certification boards demand increasing periods of higher education. Thus, in providing for an additional 9 months of educational en- titlement, it is clear that the Senate Committee was recognizing a dual purpose: First, to allow veterans having difficulties obtaining an undergraduate degree sufficient time to do so; and second, to allow other veterans to make maximum use of additional schooling to meet the increasing educational requirements of society. Following Senate passage, heavy Administration opposition to any additional entitlement at all led House and Senate conferees (not without substantial misgivings) to restrict the additional 9 months of entitlement for use only in the pursuit of a baccalaureate degree. 81 PAGENO="0692" 3312 Although this restricted additional entitlement did address itself to the problems faced by certain undergraduates who were unable to attain their degree in four regular school years, it was obvious to many of the conferees that additional problems would result from such a limitation. First, the restricted 9 months eligibility was difficult to implement. Whether one qualified for an additional benefit depended on quite technical rules. For example, a. person enrolled in a standard 5-year undergraduate program, such as pharmacy or engineering, might qualify for benefits, but, then again, he might not qualify for benefits if he was entitled to a bachelors degree at the end of 4 years. More importantly, this restriction was unprecedented. Never before in the history of the GI bill readjustment assistance program, begin- ning with the World War II GI bill (which provided up to 48 months of unrestricted entitlement in certaim eases) and including both the Korean conflict GI bill and the present program, has any stipulation been imposed in the level of training, undergraduate or graduate, for ~cs~hich GI educational assistance may be used. The result, of course, is that this limited 9-month extension, in effect, provides unequal benefits for equal service. Veterans who have pursued the same mili- tary obligation may receive unequal benefits. Veterans who had com- pleted undergraduate work and are pursuing graduate training or additional education do not qualify for the additional entitlement. The American Legion testified that: It was the judgment of The American Legion in October 1974, and continues to be our judgment that the restriction of additional eligibility to undergraduate studies is patently unfair to all those who have qualified for benefits under the Veterans Education Assistance Program. And, again in our judgment, to the extent it is unfair, it subverts the intent of the program. The additional burden demanded by employers, State licensing agencies, and professional certification boards must then be borne by the student veteran. With veteran employment rates for younger vet- erans running in excess of 15 percent, educational benefits under the GI bill program, must assist and not detract motivated veterans seeking greater opportunity through disciplines that previously required less training. Teachers, business persons, lawyers, doctors, dentists, vet- erinarians, are a few of the professions that generally require ad- vanced degrees. The vice chancellor of the university system of Georgia, testifying for the American Association of State Colleges and Universities, told the Committee that: The educational requirements needed to compete for many jobs in today's job market have been increased beyond the undergraduate level. The American Legion also testified that: The extension of the basic eligibility from 36 to 45 months for those veterans who qualify is a reasonable and practical extension in consideration of service rendered and the aca- demic requirements for completion of a higher education. PAGENO="0693" 3313 The Congressional Budget Office estimates that enactment of this provision would result in added direct benefits at a cost of $108.6 mil- lion in fiscal year 1977, decreasing to a cost of $81.3 million in fiscal year 1981. The Veterans' Administration has estimated that the cost of removing the undergraduate restriction would be $253.2 million in fiscal year 1977, an estimate the Committee believes is unrealistic. In March of 1975, the VA estimated a first-year cost of this extension to be $70.9 million. In February of 1976, the VA in a report to the Com- mittee on the 9-month extension of entitlement, estimated that enact- ment would result in a fiscal year 1977 cost of $124.1 million. Thus, CBO's cost analysis is reinforced by the VA's earlier estimates and, as such, the Committee adopts it as more accurately portraying the cost of this section. Clau$e ~ amends 1661 (a) defining entitlement to chapter 34 benefits to authorize full entitlement to educational assistance allowances under such chapter for service less than 18 months to any eligible veteran medically discharged because of a service-connected disability. The Committee notes that such veterans are at present eligible for voca- tional rehabilitation benefits under chapter 31. That program pays all the tuition or other educational expenses and grants a monthly subsist- ence allowance (currently $209 for a single veteran). Chapter 34 benefits do not separately pay tuition or other educational expenses but, rather, provide a single monthly educational assistance allowance (currently $270 per month for a single veteran). In recent years, the Committee has observed the increasing number of service-connected disabled veterans, with service of 18 months or more, who have chosen to utilize chapter 34 benefits rather than train under the chapter 31 vocational rehabilitation program. Indeed, the most recent available data reveals that of those disabled veterans who have trained under the 11 bill, fully 52 percent have trained exclusively under chapter 34. The reasons for this usage are varied. In part, the opportunity to train on a less-than-half time basis and to pursue correspondence training, both available under chapter 34 but not under 31, could be responsible. Also in part, veterans attending educational institutions, where tuition charges are comparatively low, apparently find the higher monthly assistance allowance under chapter 34 more adequate to meet their living expenses. In any event, disabled veterans with 18 months or more service are entitled to full chapter 34 benefits and are free to choose which program they wish to train under. In adopting this amendment, the Committee assumes that, but for the onset of a service-connected disability, the veteran covered herein would have satisfactorily completed 18 months of service and would have been entitled to full chapter 34 beneftts. The Committee believes that these disabled veterans are penalized through no fault of their own and when compared with other disabled veterans, are discrimi- nated against on the mere basis of time. In opposing S. 836, a measure introduced by Senator Stafford which contained identical provisions to the provisions included herein, the Veterans' Administration asserted in its written report that "under most circumstances a veteran has a better benefit program available to him through the vocational rehabilitation program. .. ." Exten- sive usage of chapter 34 benefitsby chapter 31 disabled veterans, by im- plication, questions that assertion. In any event, this section does not 83 PAGENO="0694" 3314 compel utilization of chapter 34; it only permits it. The Committee assumes that effective outreach and a competent counseling program by the Veterans' Administration will allow the agency to explain the relative merits of both programs. The Veterans' Administration did not estimate any cost for the enactment of this clause and the ~Jommit- tee assumes that it is minimal. Section 204 This section amends section 1662(a) of title 38, United States Code, by providing au exception' to the normal 10-year delimiting period during which eligible veterans can use their educational assistance benefits. This section provides that a veteran who was prevented from initiating or completing a program of education within the 10-year period because of physical or mental disability, not the result of the veteran's own willful misconduct, may be granted an extension of the delimiting period equal to the period during which the veteran was prevented from pursuing such education. The current 10-year de- limiting period assumes that a veteran is in a position to exercise GI `bill benefits. If during that period of time the veteran is prevented be- cause of a physical or mental disability (which may or may not be service-connected) then that period of time should not be counted in the computation of the delimiting period. In determining whether the disability sustained was the result of the veteran's own "willful misconduct", the Committee intends that the same standards be applied as are utilized in determining eligibility for other VA programs under title 38. In ,this connection see 38 C.F.R., part III, paragraphs 3.1 (n), 3.301 and VA manual M21-1, § 1404. Although continuing to urge that the general delimiting period for all veterans be reduced from 10 to 8 years, the Veterans' Administra- tion has reported to the Committee that it believes that "consideration should be given to the enactment of a provision which would extend the entitlement of those eligible veterans who, because they were incapacitated through circumstances beyond their control, have been unable to utilize their potential entitlement." The Veterans' Administration estimates that any additional cost which would accrue from the extension authorized by this section would "be fairly minimal". Section 205 This section requires the Administrator to carry out a thorough and comprehensive study of vocationa~l objective programs in order to de- termine whether the objectives of the programs are being met. The Administrator is directed to place particular emphasis on the require- ments of section 1673 (a) (2) of title 38. That section, as amended in 1974 by section 203(1) of Public Law 93-508, provides that the Ad- ministrator shall not approve the enrollment of a veteran in any voca- tional objective course which fails to submit justification sho~ving that at least one-half of the available course graduates during a preceding 2-year period have secured employment in the occupational category for which trained. The Committee believes that compliance with the "50 percent" em- ployment requirement is an important tool in assuring that the pur- poses of the GI bill are and continue to be met. Following enactment PAGENO="0695" 3315 of this provision in 1974, considerable time elapsed before the VA issued implementing regulations and forms and schools were required to submit the data showing compliance with the provisions of section 1673 (a) (2). Such data was finally submitted in November 1974. A preliminary examination revealed that the Veterans' Administration received reports covering 25,982 courses with 9,040 course graduates. Reports were not received for 10200 courses with an unknown num- ber of graduates. Of those submitting reports, only 2.7 percent of the courses failed to meet the 50 percent employment requirement. Indeed, according to the Veterans' Administration, the submitted data asserted that the mean and median percentage of courses with graduates employed in the type of work for which the course offered training or closely related employment was 87.1 percent and 98.8 percent, respectively. Included in the total were both correspondence and flight training schools, the vast majority of which submitted forms which, on their face, also showed compliance with the 50 per- cent employment requirement. A few months later, however, the ad- ministration recommended to Congress that authority for enrollment of veterans into correspondence or flight training courses be termi- nated. In so recommending, the Administrator asserted that "there is ample evidence that the training does not lead to jobs for the major- ity of the trainees, and that the courses tend to serve as avocational/ recreational, and/or personal enrichment rather than basic employ- ment objectives". Such an assertion appears to contradict directly the recent flight and correspondence schools submissions which claimed that 50 percent of the course graduates had secured employment in the occupation for which they were trained. The Veterans' Administration challenged only a few of these sub- missions. The Committee concludes that either the Veterans' Adminis- tration's position in favor of terminating authority for these programs is based upon insufficient facts or the obvious congressional intent of the 50 percent rule has not been effectuated. There is a growing sus- picion that the latter is the case. This suspicion is reinforced by what the Committee understands to be the almost total failure of both the State approving agencies and the Veterans' Administration to review or verify the submitted data. If it is shown that the 50 percent rule is not administered or complied with as contemplated by Congress, then the Committee believes that the appropriate remedy would be the application of the rule in a manner Congress intended, rather than blanket exclusion of particular modes or fields of study. Rigorous application and enforcement of the 50 percent employment rule would terminate enrollment for avocational/recreational purposes and ter- minate inferior training while allowing those schools meeting basic vocational objectives to continue enrolling veterans. There are several possible reasons why the reports submitted may not accurately reflect the schools effectiveness as demonstrated by the number of students who secure training related jobs. First, imple- menting regulations and forms may not have sufficiently effectuated statutory mandates and Congressional intent. The forms developed by the Veterans' Adminj~tration contained exclusions and methods of calculation which may be incorrect or excessively permissive. Defini- tions of the occupations for which the training is designed may be overly mclusive. Insignificant avocational earnings, which may have 85~ PAGENO="0696" 3316 resulted from the course, may have been improperly included as satis- fying the employment requirement. A second cause of the apparent ineffectiveness of the 50 percent rule may be that there has been insufficient monitoring and compli- ance survey activities both by the State approved agencies and the Veterans' Administration. As noted earlier, it is the Committee's un- derstanding that there was no validation of submitted data by the State approving agencies and little, if any, by the Veterans' Administration. A third basic cause may be that there has been incorrect reporting by schools either by inadvertance, confusion or design. Finally, it might be that additional amendments, providing more adequate statutory authority, are required in order to achieve the congressional intent that occupational goals are, in fact, pursued and obtained. Such amendments could require certain completion levels, eliminate certain exclusions or increase the required employment per- centage. One possibility, which should be examined is that in calcu- lating the 50 percent employment requirement, it be based on the number who enter training rather than complete a course of training. In any event, further study is both appropriate and necessary. The Committee directs the Veterans' Adiministration, either "in house" or by contract, to conduct a thorough study of vocational objective pro- grams. The report of the study should facilitate the administrative and legislative corrections which would be needed if the intent of the GI bill is to be met. In addition to submitting whatever data the Vet- erans' Administration deems appropriate in considering this issue, the Committee has specifically directed the agency, with respect to section 1673 (a) (2), to include within its report the following: (1) the number of veterans and institutions submitting justifi- cation asserting compliance with the requirements of such section and the extent to which any courses were challenged or disquali- fied by a State approving agency or by the Veterans' Adminis- tration; (2) the number of institutions and courses for which justifica- tion showing compliance with the requirements of such section was not submitted; (3) the number of courses for which justification showing.com- pliance with the requirements of this section was submitted and actively reviewed by either the appropriate State approving agency or by the Veterans' Administration; (4) the extent to which courses subject to the requirements of such section have not been identifiedor surveyed;. (5) the extent to which vocational objective programs have been converted to degree programs following enactment of Pub- lic Law 93-508; (6) information as to completion rates of those courses submit- ting placement reports pursuant to such section; (7) the extent to which justification submitted pursuant to such section disclosed invalid survey nopulation; (8) the extent to which justification submitted pursuant to such section disclosed improper exclusion of students who completed the course but did not take or pass a licensing examination given by the State; 86 PAGENO="0697" 3317 (9) the extent to which justification submitted pursuant to such section disclosed improper exclusion of persons employed ~n other fields; (10) the extent to which justification submitted pursuant to such section disclosed improper exclusion of persons as being in closely related occupations, when, in fact, they were not; (11) the extent to which justification submitted pursuant to such section disclosed improper exclusion of some persons as not being available for employment; (12) the extent to which there are deficiencies in basic proce- dures, instructions, and forms issued pursuant to such section; and (13) the extent to which vocational objective programs are being pursued for a vocational or recreational purposes. The Administrator is required to report the results of the study to the Congress and the President not later than 6 months after the enact- ment of this act. The report shall include such recommendations for legislative or administrative action as the Administrator deems appro- priate. In this connection, the Committee expects the Veterans' Admin- istration to examine and revise, if necessary, its regulations and forms, in accordance with the congressional intent, to assure the effectuation of the 50 percent rule and other basic provisions governing vocational objective courses. The Committee also intends that immediate steps be undertaken to vertify the data previously submitted by schools in connection with section 1673 (a) (2). If the Veterans' Administration concludes that statutory authority is insufficient or that it should be strengthened, the Committee expects to receive specific legislative rec- ommendations in the report of the Administrator. In sum, properly applied standards, which discriminate on the basis of occupational success of vocational courses, appears preferable to blanket action terminating whole areas or modes of training. Section 206 This section makes two principal amendments to section 1673 relat- ing to the disapproval of enrollment in certain courses. Clauses 1,2 aiu1~ amend section 1673 (a) by adding a new paragraph 4 which prohibits enrollment in any independent study program ex- cept one leading to a standard college degree. A.t the time the current 11 bill program was enacted in 1966, the concept of independent study was not specifically considered by the Congress. However, this clause codifies a long-standing Veterans' Administration position that inde- pendent study be limited to those programs leading to a standard college degree. A similar amendment to section 123(a) pertaining ~o chapter 35 eligible persons is contained in section 306 of this act discussed, infra. Claw~e 4 amends section 1673(d) to extend generally to all courses the statutory limitation with respect to the percentage of veterans eligible to enroll in a course. Currently, subsection (d) directs the Administrator not to approve the enrollment of any veteran (not already enrolled) in any course not leading to a standard college de- gree which is offered either by the nronrietary-for-profjt or propri- etary-not-for-profit educational institution where more than 85 per- cent of the students are wholly or partially subsidized by the Veterans' .~tdministration or the institution. 87 PAGENO="0698" 3318 This section, first enacted by the Congrz~ss when it authorized the Korean Conflict GI Educational Assistance Program in 1952 under Public Law 82-550, was an outgrowth from recommendations of the House Select Committee to Investigate Educational Training and Loan Guarantee Programs Under the GI bill. The House Select Committee, chaired by the Honorable Olin E. Teague, looked extensively into the abuses and problems which plagued the World War II GI bill program and concluded that "a new act should be written extending educational benefits to veterans who served during the Korean conflict." It recom- mended in part that: 4. Enrollment of veterans in institutional training should be limited to courses offered by public schools and colleges, or to courses in private schools which have been in successful operation for at least one year and which maintain an en- rollment of at least 25% non-veteran students. The result of this recommendation was the enactment of section 1673 (d). While reviewing the legislative history and intent of this sec- ~ion during consideration of the 1974 GI bill an-iendments, it became evident to the Committee that Congress was concerned about schools which developed courses specifically designed for those veterans with available Federal moneys to purchase such courses. At the time that the section was originally enacted, the veterans educational assistance pro- gram was, of course, the prime (if not sole) source of Federal funds which could he utilized by students who enrolled in such courses. The ready availability of these funds obviously served as a strong in- centive to some schools to enroll eligible veterans. The requirement of a minimum enrollment of students not wholly or partially sub- sidized by the Veterans' Administration was a way of protecting veterans by allowing the free market mechanism to operate. The price of the course was also required to respond to the gen- eral demands of the open market as well as to those with available Federal moneys to spend. A minimal number of nonveterans were required to find the course worthwhile and valuable or the payment of Federal funds to veterans who enrolled would not be authorized. As originally enacted in 1952, the 85-15 rule applied only to "non- accredited" courses not leading to a standard college degree. In 1974, after reviewing the history of this section, the Committee concluded that whatever reasons there originally may have been to limit the rule. to nonaccredited schools, those reasons were no longer applicable. Accordingly, section 203(3) of Public Law 93-508 ex- tended the so-called 85-15 rule to accredited pr~prietary-for-profit and not-for-profit institutions not leading to standard college degrees. Courses under subchapter IV for the educationally disadvantaged and subchapter V for PREP were specifically exempted from the opera- tion of the revised section because they were, by their very nature, designed for the exclusive enrollment of veterans or other eligible per- sons under this title. Upon further examination this year, the Committee has concluded that the rationale for the application of the 85-15 rule should be logically extended to courses other than just those not leading to a standard college degree. 88 PAGENO="0699" 3319 The Veterans' Administration, after noting increased recruiting by certain accredited institutions directed exclusively at veterans, in its report to the Committee stated that: It is our position that, if an institution of higher learning cannot attract sufficient nonveteran and nonsubsidized stu- dents to its programs, it presents a great potential for abuse of our GI educational programs. The Committee shares this concern and believes it is important, when mandating Gil bill expenditures of great magnitude, to limit those situations in which substantial abuse could occur. The Committee emphasizes its belief that the requirement that no more than 85 percent of the student body be in receipt of VA benefits is not onerous particularly given the fact that under today's Gil bill, unlike the World War II program, veterans do not comprise a major portion of those attending institutions of higher learning, as revealed in the following table: TABLE 24.-VETERANS AS A PERCENTAGE OF STUDENTS ENROLLED IN INSTiTUTIONS OF HIGHER LEARNING Year U.S. peak fall enrollment, JUL GI bill trainees, JUL Percentage 1976 (estimate) 1975___ 1974 1952 1951 1950 1949 1948 1947 11,290, 719 10,321, 539 9,709,000 2,263,102 2,228,873 2,419,037 2, 592, 517 2,548, 507 2,479, 402 1, 294, 267 970, 173 970,467 281,254 402,467 580,597 843, 803 984, 009 1, 157, 966 11. 5 ~ 100 12.4 18.1 24.0 32.5 38. 6 46. ~ In addition, in computing the 85-15 requirement, the amendment would require the inclusion of not only those students subsidized by the Veterans' Administration, but also those students in receipt of grants from other Federal agencies. The Committee believes the inclusion of other students receiving Federal grants is consistent with the general intent and rationale of section 1673(d) as previously discussed. This would include Federal grants such as basic educational opportunity grants (BEOG) and supplemental education opportunity grants (SEOG) made by the Department of Health, Education, and Welfare. This provision only includes direct Federal grants which do not have to be repaid by the recipient. Thus, it would not apply to direct Federal loans, federally insured loans or college or work/study (which is "repaid" by the student services). To gage the impact of the addition of Federal grants to veterans benefits in calculating the requirements of the 85-15 rule, the Com- mittee requested information from the Congressional Research Service concerning the number of students in receipt of Federal assistance. Although figures for individual programs exist, there is no precise data as to the unduplicated number of federally assistcd students. CRS estimates, however, that the unduplicated number of federally assisted students in the current fiscal year (excluding the guaranteed student loan program) does not exceed 14 percent. Again, although 89 PAGENO="0700" 3320 the 85-15 rule does not appear onerous when compared with this fig- ure, the Committee recognizes that with respect to Federal grants there may be situations where greater flexibility is desired particularly with respect to certain developing institutions. Accordingly, the Ad- ministrator, upon the recommendation of the Secretary of Health, Education, and Welfare is granted authority to waive the requirements of section 1673 (a) with respect :to Federal grants if it is determined to be in the interest of the eligible veteran. In addition to continuing the exemption for educationally disad- vantaged and PREP courses, the amendment would also specifically exempt farm cooperative training for veterans from the operation of the 85-15 rule. The Veterans' Administration stated in its report to the Committee: The primary objective of the farm cooperative program is to provide meaningful instruction for the fanner while concurrently engaged in active agricultural employment. Farm cooperative programs are generally offered by high schools, area technical schools, and community colleges, and are frequently the result of the joint effort of the State De- partment of Education, local school officials and county farm agents. These programs are designed primarily for veteran participation. We have found that, when an area is not serv- iced by an institution offering such a course, a group of vet- erans engaged in full-time fanning has organized such courses with the aid of local groups for veteran participation. The Veterans' Administration is unable to estimate the cost impact of the extension Of the 85-15 rule because it lacks accurate information as to the extent of veteran enrollment in courses which are not pres- ently covered by section 1673 but which may exceed the 85 percent of total course enrollment rule. The Congressional Budget office, however, estimates that enactment of this section coupled with other Adminis- tration cost savings included in the bill will save $31.6 million in fiscal year 1977 and a total of $151.9 million through 1981. Section 207 This section amends section 1674 relating to discontinuance of VA payments to veterans for unsatisfactory progress or conduct by pro- viding that absent mitigating circumstances, progress will normally be considered unsatisfactory at any time an eligible veteran is not progressing at a rate which would permit such veteran to complete training within the length of the course based in the training time as certified to the Veterans' Administration. This section is intended to specify a minimum basic standard of progress which will normally be required of veterans in receipt of VA educational assistance payments. As noted elsewhere in this report, the Committee is aware of numerous situations in which substantial numbers of veterans were enrolled at certain institutions and in receipt of veterans benefits for extended periods of time, yet made little if any progress toward obtaining the degree for which enrolled. This amendment provides that regular progress toward a degree must be made by the veteran. Thus, under this provision if a veteran is enrolled in a 4-year program of education, and enrolled in a full course load as defined by the institution, his normal completion time 90 PAGENO="0701" 3321 as certified by the school would be 4 years. If he is enrolled on a half- time basis, the normal completion time, of course, would be 8 years. The Committee notes that for the purposes of full time VA benefits a veteran.need only be enrolled in 12 credit hours even though 15 may be required by the school in order to completely obtain a baccalaureate degree within 4 years. Thus, for those veterans taking only a 12-credit- hour load it would normally be expected that the veteran would attain such degree in 5 years, even though for the purposes of VA payment he would be in receipt of "full time" benefits. The Committee wishes to emphasize that these are simply minimum standards and schools may imposesuch additional standards of prog- ress as they deem necessary and appropriate. The Administrator is granted authority under this section to waive the requirements of this provision if he finds mitigating circumstances. While the Committee expects the VA to enforce the provisions in a manner which. eliminates Federal payments to those not seriously pursuing an education, it also intends that the waiver authority will be exercised with compassion and understanding of the domestic dif- ficulties and problems often encountered by educationally disadvan- taged veterans who are making a serious attempt. Finally, it should also be observed that, even if the Administrator does not find mitigating circumstances educational assistance allow- ance payments may be renewed following VA counseling of the vet- eran, if it is determined (a) that the cause of the unsatisfactory conduct or progress of the veteran has been removed; and (b) that the program which the veteran now proposes to pursue (whether the same or revised) is suitable to his aptitudes, interests and abilities. A similar amendment concerning satisfactory progress is adopted with respect to eligible persons training under chapter 35 in section 307 infra. Section 208 This section amends section 1682 which directs how education al- lowances for institutional training will be computed. A new subsection (e) is added which codifies existing regulations and practice regarding payment to an eligible veteran who is pursuing an "independent study program" which leads to a standard college degree. Educational allow- ances for an independent study program are to be computed at the lesser of either the established tuition charge, including fees, or $292 per month. If independent study is combined with resident training which constitutes the major portion of that training, then the regular monthly allowance of $292 is payable (increased from the current $270 by section 201(4) of this Act). This clarification and codification of these rules was prompted in part by evidence of abuse of independent study. Where significant Federal payments are concerned, as with the GI bill, the potential for abuse is high, particularly in the case of "independent study"; a comparatively unstructured situation where verification and super- vision is often difficult. In the past 2 years, the potential for abuse has unfortunately been realized in a number of instances. For exam- ple, the Veterans' Administration testified this year about a proprie'- tary-for-profit correspondence school which entered into a contract with an educational institution of higher learning accredited by the North Central Accrediting Association. The VA further testified: PAGENO="0702" 3322 The terms of the agreement were that the school would, through a program of independent study, confer a two school year (equivalent) associate of technology degree and exercise administrative control over the program. The individual courses in the program were similar to, if not the same as, the corporation's correspondence course. The corporation sold and taught the course using their representatives. The degree program, based on the school's accreditation, the State Ap- proval Agency's favorable action, and compliance with pro- posed regulations on independent study published in the Code of Federal Regulations, September 27, 1973, was ap- proved for full-time educational assistance under the law. The cost of the course to the student was $2,107 for the equivalent of 1 school year. Of this $2,107, the corporation received $1,777 for its services. By November 1974, more than 13,000 veterans located in approximately 40 States had been enrolled and were receiving benefits. Classes were conducted at a number of nontraditional settings. For the most part, students were attending class 1 day a month at a motel and were being paid at the same rate as students who were actually attending the main campus of the university on a full-time basis. University officials, apparently because of their inability to maintain effective administrative control, terminated their contract with the corporation and would not accept new enrollments effective November 8, 1974. In response to this and other situations, the Veterans' Administra- tion clarified, revised and tightened its independent study regulations in December 1974. As revised, in order for an eligible veteran to receive VA educational assistance for the pursuit of an independent study course, such course must consist of a prescribed program study with provisions for interaction either by mail, telephone or personally, or by class attendance between the student and regularly employed faculty at the university or college. The Veterans' Administration has informed the Committee that it lacks sufficient data to estimate the cost savings resulting from enactment of this section. Section 209 This section amends the Veterans' Student Services Program au- thorized under section 1685 of title 38~ United States Code, to grant the Administrator greater flexibility for permitting veterans to con- tinue and complete their work-study agreements even if there has been a change in their school status. Under the Veterans' Student Services or Work Study Program,. a veteran enrolled under chapter 31 or 34 (with priority consideration given to those veterans with 30 percent or greaer service-connected disability) may enter into an agreement with the Veterans' Admiinstration to `perform various veteran related services during or between periods of enrollment such as outreach ef- forts or the preparation and processing of necessary veterans' papers or other documents. Under this agreement the veteran may contract to work up to 250 hours a semester or under applicable enrollment period for which the veteran is paid at a rate of $2.50 `per hour of which up to $250 is paid in advance. PAGENO="0703" 3323 Section 1685(b) provides that the Veterans' Administration may utilize the services of the veteran students participating in a ivork/ study program only while they are pursuing a full-time program of education or training under chapter 31 or 34. Consequently, if a veteran student reduces his training load to less than full-time or ends school enrollment prior to completion of the agreement, the Veterans' Admin- istration must terminate the agreement. When the veteran has not per- formed the number of hours represented by the advance payment to him, the amount of the advance payment which represents the num- ber of unworked hours is considered an established overpayment chargeable against the veteran. This section amends section 1685 (b) to provide that, even if the veteran ceases to be a full-time student before completing the agreement, the veteran may be permitted, with the ap- proval of the Administrator, to complete the work. This amendment permits veterans to complete work/study agree- ments, even if they are no longer full-time students or enrolled in school. It is intended to help prevent overpayments to individuals who need and actively seek out funds under the work/study program to permit them to continue their education. The Committee also assumes that such authority would present fewer administrative problems to the Veterans' Administration. The Veterans' Administration supports enactment of this provision which it says is necessary for it to "fully carry out Congress' intent to utilize veterans in work/study programs when the individual actively demonstrates a need for assistance which the work/study program affords". The VA further reports that the costs entailed by this section would be minimal. Section 210 This section amends the Special Supplementary Assistance Program authorized under section 1692 of title 38, United. States Code, to in- crease benefits and expand eligibility. Section 1692 currently provides that any veteran enrolled in an educational institution who is pursuing a postsecondary program of education on a half-time or better basis may receive "individualized tutorial assistance" when the veteran has "a deficiency in a subject" which is required if the veteran is to pursue his or her program of education satisfactorily. Currently, the veteran may receive assistance at the rate of $60 per month for a maximum of 12 months or until a maximum of $720 is utilized. The educational in- stitution is required to certify that the individualized tutorial assist- ance is essential to correct the deficiency, that the tutor chosen to per- form the assistance is qualified, and that the charges for such assistance do not exceed customary charges for tutorial assistance. Ciau,ge 1 amends section 1692 (a) by authorizing individualized tutorial assi3tance for the academic portions of institutional technical courses not leading to a standard college degree for veterans who have not received a high school diploma or equivalency certification. The Veterans' Administration considers a course or nrogram to be postsecondary if the school generally requires the C-ED certificate or completion of high school as an admission requirement, even though it has provisions for accepting some students solely on the basis of general admission and tests. However, if an admissions examination 93 PAGENO="0704" 3324 is the sole requirement for entrance, the Veterans' Administration has taken the position that the course may not be considered post-sec- ondary for tutorial purposes (cf. section M-48, VA Program Guide 21-1). In this connection, it has come to the attention of the Commit- tee that there are State vocational-technical programs which do not require~ as part of their admissions requirements, completion of high school or GED. Consequently, such vocation al-techni cal students cannot qualify for tutorial assistance under section 1692. While the Committee continues school diploma or its equivalency, it believes that the exclusion of tu- torial assistance for veterans who are enrolled in vocational-technical schools and who are in need of such assistance is counterproductive. There are many veterans who have excellent aptitudes for vocational- technical careers who may be deficient in communications or mathe- matical skills. This amendment permits individualized tutorial as- sistance in those academic portions of the vocational-technical course to enable, for example, proficiency in math and reading skills. It is not intended, however, that tutorial assistance be provided in the case of shop or laboratory portions of such vocational courses. Clause 2 amends section 1692 (b) to provide an 8 percent increase in the maximum amount payable for tutorial assistance. Tutorial assist- ance benefits are increased from $60 to $65 per month for a maximum of 12 months or until a maximum of $780 is utilized (currently $720). In increasing and expanding t~itoria1 benefits, the Committee would be remiss if it failed to acknowledge that a number of cases have been brought to its attention recently concerning instances where false cer- tification of individualized tutorial assistance has occurred and con- victions obtained. In certain instances~ the tutoring was done in groups and not on an individual basis as required by law; in other cases there was no tutoring or less tutoring than certified. And in other cases se- rious questions have been raised as to the qualifications of certain tutors, although such tutors must be certified to the Veterans' Administration as oualified by the schools under section 1692(b). The Committee expects the Veterans' Administration to monitor the tutorial pro~rram to ensure that schools are thoroughly familiar with all rules and that these reciuirements ~re being fully complied with. The Congressional Budget Office reports that the costs occasioned by enact- ment of dense 1 era minimal. The increese in tutoring allowances is estimated to cost $0.3 million for each of the next 5 years. Section 211 This section makes a number of technical amendments to chapter 34. Clause 1 eliminates specific reference to the "United States Code" in section 1652(e) to conform that section with the style of reference used in title 38 when referring to another title of the United States Code. Clause 2 deletes in sections 1681 (a) and (b) reference to section 1780 and s~ubstitutes a broader reference to chapter 36 where that sec- tion is found. Clause 3 redesignates section 1697A concerning coordination with and participation by the Department of Defense in PREP programs as section 1698 to conform with general practice of numbering sections within title 38. 04 PAGENO="0705" 3325 Clawse 4 amends the table of sections with the beginning of chapter 34 to reflect the redesignation in clause 3 of section 1697A as section 1698. Section 212 This section makes a number of technical amendments to chapter 34 to remove unwarranted and unnecessary gender references. The follow- ing sections are affected: 1652, 1661, 1662, 1663, 1670, 1671, 1673, 1674, 1676, 1681, 1685, 1691, 1696, and 1698 (as redesignated by section 211 (a) of this Act). Section 213 This section amends section 1663 concerning educationa4 and voca- tional counseling of eligible veterans by the Veterans' Administration to direct that effective comprehensive counseling service be provided to all veterans who desire such services. The section is further amended to direct the Administrator to carry out an active outreach program to acquaint and encourage veterans wherever appropriate to utilize such counseling services. The availability of VA educational, vocational and rehabilitation counseling (currently discretionary for chapter 34 eligible veterans) is intended to aid veterans make the best use of their educational and training benefits by helping them (1) arrive at sound decisions about their educational and vocational goals and (2) plan programs of edii- cation or training that will enable them to attain these goals. These counseling services are offered through 70 VA locations and about 170 college, university, community and private counseling cen- ters under contract with VA. Since the inception of the current GI bill through June 1974, only 227,450 or 4.65 percent of the 4,895,000 veterans who have trained under the program have been counseled. Even smaller percentages of veterans have been counseled in the past 3 years as revealed by the following table: TABLE 25.--CHAPTER 34-VETERANS COUNSELED, FISCAL YEAR 1974-76 Veterans trained Veterans counseled Percent of veterans counseled Fiscal year: 1974 1975 1976 2,128 366 2 424, 676 2,535,432 34,715 44, 928 48,815 1.6 1. 9 1.9 On August 11, 1976, the General Accounting Office submited to the Committee on Veterans' Affairs a report which included responses of veterans to questions about the VA educational assistance programs. The report indicated that many veterans were both unaware of and in need of VA counseling service. Of the 5,491 veterans responding to a GAO questionnaire, 2,244, or about 41 percent said that they were not aware that VA offered coun- seling services. Of the 2,244, about 70 percent said that they would have requested VA counseling had they been aware of it. 95. 78-226 0 - 77 - 45 (Pt.4) PAGENO="0706" 3326 The following is a tabulation of GAO questions and the response pertaining the counseling: Did you request and receive any counseling, advice, or information from VA prior to enrolling in this training? Response Number Percent Yes was tested or counseled by VA about my aptitudes or training plans... Yes $ received information or advice about my training and benefits from VA. No I requested but did not receive any guidance from VA No I was awaie of it but did not request VA guidance No I was not aWare that VA guidance was available 233 1, 167 133 1, 714 2,244 5,491 4.2 21.3 2.4 31.2 40.9 100.0 Total Would you have requested VA guidance if you had been aware of it? (Asked only those giving the last response above.) j. Response Number Percent 1,549 No 560 No response 135 69 25 6 Total 2,244 100 Note: The above responses do not reflect answers from graduate students. The report of General Accounting Office underscores the importance of available and comprehensive counseling services designed to aid veterans in arriving at a sound decision about their goals and help them plan programs of education and training that enable them to attain those goals. GAO found that one out of every five veteran re- spondents questioned the value of their training. The report noted: While responses differ significantly depending on the type of training taken, overall, 20 percent of the respondents said that the training they took under the GI bill was of little or no use with regard to their training objective or career plan. The following table reveals responses by types of training by both completers and noncompleters.: 96 PAGENO="0707" Li -a C- C C.) 2: 0 2: C 2: C,, I- Li -J C- 2: 0 C.? C C,, C, 2: 2: U. 0 2: -J C.!) LU -J 3327 ~in ie~{!)a)~4Cr~ .~r~:co~d ~~-C~J-C-JC-J ~L9U C!) ~!)~!) ~ ~(! moa~acooo~ ~ OC~JCOCJOO )C!4~ ~C!)C!)C!)~C!) r-a~r~dcd IL) ~4P~OOC) O$,r~.~?~.O) w5Ld o~ ~ C)~ COO! U~ LL)~~ ~~C!) IL) CO C!)CO 0~iO! C IL~ COO!!) C!)IL)C!LC!)C!)C!) (C) E 2: E C.) 0 0 2: a 2: LU a 0 2: a 0 2: LU a 0 2: a -J 2: 97 PAGENO="0708" 3328 Educationally disadvantaged veterans who presumably have a much greater need for such services have rarely received counseling. The 197~ Congiessionally directed study of the Gi bill legislation by the Educational riescing Service of Princeton, New Jersey, found that only 2.9 percent of those educationally disadvantaged veterans in training had never received counseling from a VA contact officer. The Committee further expeecs that a veceran who requests VA educational and vocational counseling will, in fact, receive thorough and competent guiaance and counseling which will enable the vet- eran to make the best use of his education and training benefits. The Committee intends that comprenensive co tinseling provide the vet- eran the wherewithal to (1) arrive at sound decisions about educa- tional and vocational goals, and (2) plan a program of education or training that will enable the veteran to attain a chosen goaL In this regard, the Committee stresses that it is vital that each veteran who seeks vocational and educational counseling be exposed to those pro- grams and services which could be of assistance to the veteran as he pursues his educational or vocational objective. Under this section, VA counselors would also be expected to make appropriate referals with respect to other problems such as those of a readjustment or health nature. Too often, the multifaceted Federal and lOcal goveininent programs are perceived by the individual veteran as fragmented and disjointed. Too often, the veteran is in need of personal readjustment, the effect of which could prevent the veteran from securing the maximum ad- vantage from his educational entitlement. To assist the veteran in arriving at a wise decision in regard to his educational or vocational goals, or to aid the veteran in overcoming his personal readjustment problems, comprehensive counseling must integrate the many pro- grams into a coherent and uriderscandable pattern. For example, a counselor should be able to assist those veterans who seek parc-time work or are in need of supplemental income by guiding the veteran to the local Comprehensive Employment and Training Act (CETA) prime sponsor. Prime sponsors are specifically authorized to create split-jobs for veterans who are going to school. The split-job approach permits the prime sponsor to split one job between two school-going veteians-the two split the job to correspond with their schooling. rfhis concept has been underutilized and the failure of veterans to be ap- prised of the opportunity is a contributing factor to this under- utilizatjon. The Committee believes that it is imperative that each veteran who requests assiscance under section 1663 be provided comprehensive assistance to guarantee that the use of educational entitlement by such veteran results in tue maximum advantage to the veteran and to the soclety. Accoxdingi~T, Ctuwse I amends the first sentence of section 1663 by requiring the Veterans' Admini~rration to maite available cumpre~ hensive counseling services including, but not limited to, vocational and educational counseling to any eligible veteran who reauests it. Clawse 2 directs the Administrator to carry out an effective out- reach program to acquaint all eligible veterans with the availability of such counseling and its benefits and advantages. 98 PAGENO="0709" 3329 TJTLE JJJ-.CHAPTFR 35 SURVJVORS' AND DEPENDENTS' EDUCATIONAl, ASSJSTANCE RATE AND PRO(~RAM ADJUSTMENTS Section 301 This section amends chapter 35. where applicable and necessary, to provide 8 percent increases in educational, assistance allowances sim- ilar to those provided veterans in chapter 34. In most instances, the increases provided in chapter 34 are automatically applicable to sur- vivors and dependents training under chapter 35, pursuant to section 1732(a) or (b), which. provide that chapter 35 educational assistance allowances shall be computed at the rate prescribed in section 1682 of chapter 34 (as amended by section 201 of this Act). The Veterans' Administration estimates that 107,700 persons will be affected in the first fiscal year at an additional cost of $16.0 million which increases gradually to 109.600 persons and $lGi million at the end of 5 years. The Congressional Budget Office differs slightly estimating first year cost at $16.5 million declining to $16.0 million at the end of 5 years. * Clause 1 amends section 1732(b) to provide an 8 percent increase in the educational allowance paid on behalf of an eligible person pur- suing a full-time educational program which consists of institutional courses and alternate phases of training in a business or industrial es- tablishment. As amended, the rate is increased from $217 to $235 per month. Clause £ amends section 1742 (a) to increase the special restorative training assistance allowance by 8 percent from $270 to $292 a month and payable to the parent or guardian of the child in need of such training. Further, if the tuition and fees applicable for any such course are more than $92 (presently $85) per calendar month, the basic monthly allowance may be increased by the amount that such charges exceed that monthly figure if the parent or guardian elects to have the entitlement reduced by 1 day for each $9.76 (presently $9.02) that the special training allowance paid exceeds the basic monthly allowance. The number of persons receiving this training is quite small ranging generally from 30 to 35 `at any one time. Section 302 This section amends section 1701 of title 38 which defines basic terms utilized in chapter 35 by adding definitions of the terms "institution of higher learning" and "standard college degree." Both terms have been regularly used by the Veterans' Administration for some time and have well established meanings pursuant to regulations issued by the Agency. The amendments made by the section are intended to codify existing regulations and practice. Identical definitions are pro- vided for chapter 34 and chapter 36 in section 202 of this Act, supra. Section 303 This section makes two basic amendments to section 1711 of title 38 relating to basic periods of eligibility for eligible dependents and survivors in order to aline the benefits provided in chapter 35 with those provided in chapter 34 wherever feasible and practical. Clause 1 amends section 1711 (a) to provide an additional 9 months of eligibility so that the maximum period of eligibility for survivors `and dependents training under this program will now be 45 months 99 PAGENO="0710" 3330 rather than the current 36. This amendment is consistent with the unrestricted additional 9 months granted to veterans training under chapter 34 in section 203 of this act, justification for which is set out in full in the Committee's report to that section, supra. The Veterans' Administration estimates that in the first fiscal year, 5,000 trainees will take advantage of this provision at a direct benefit cost of $10 million, decreasing gradually by the fifth year to 3,300 trainees at a cost of $6.6 million, all as set forth in the following table: TABLE 27.-9-MONTHS ADDITIONAL ELIGIBILITY FOR CHAPTER 35 TRAINEES Direct benefits Trainees cost (millions) Fiscal year: 1977 1978 1979 1980 1981 Total 5000 4,100 3,300 3, 300 3,300 $10.0 8.2 6.6 6.6 6.6 38.0 Congressional Budget Office estimates that the first year cost of this provision will be $11.1 million declining to $10.8 million in fiscal year 1981. Clawse t~ amends section 1711 (b) to permit a limited amount of ad- ditional entitlement to those dependents who lose their chapter 35 eligibility because (a) the veteran parent or spouse is determined no longer to have a total disability of a permanent nature; or (b) the veteran parent or spouse who was listed as a prisoner of war, missing in action, or detained by a foreign power, is no longer so listed; or (c) the spouse of a permanently and totally disabled veteran is divorced without fault on the part of the spouse. The law currently provides that in the event of any of the foregoing occurrences, chapter 35 eligi- bility must terminate except that the person may continue receiving benefits until the end of the quarter or semester for which enrolled. If the institution is not operated on a quarter or semester basis, then benefits may continue until the end of the course or until 9 weeks have expired (whichever first occurs). This amendment would extend the period in the latter situation from 9 to 12 weeks, an extension which is consistent with extended entitlement rules currently applicable to veterans training under chapter 34. Section 304 This section amends section 1712 concerning periods of eligibility for children under chapter 35 by expanding that eligibility and making changes consistent with those provisions governing chapter 34 beneficiaries. Clawse 1 amends section 1712(a) (3) and (4) to extend the eligi- bility period for children from 5 years to 8 years in which to complete their education. Currently, section 1712(a) provides that the normal period of eligibility runs from age 18 (or the completion of secondary schooling if earlier) until age 26 oi~ apet~iod of 8 years. Paragraph 4 of subsection (a). however, provid~s that in the event such persons serve on active duty with the Armed Forces, the period of eligibility is 5 years following the person's first discharge (but not beyond age 31). Accordingly, this amendment e~tends the normal period of eligibility 100 PAGENO="0711" 3331 from 5 to 8 years for those who served on active duty and makes such period consistent with the normal eligibility period contained in subsection (a). Clause 2 amends 1712 (a) (5) (B) relating to extension of entitle- ment. Currently, the law provides that the eligibility of a dependent or survivor attending instihitions not operating on a quarter or semester system which otherwise would expire may be extended to the end of the course or 9 weeks, whichever first occurs. This clause extends the maximum period from 9 to 12 weeks to equate the pro- vision with that currently governing extended entitlement for veterans training under chapter 34 (cf. § 1661 (c)). Clause S repeals 1712(d) which presently permits an extension of eligibility for child~en equal to the amount of time elapsed between their 18th birthday, or the day on which their application for benefits is filed (whichever is later), and the date of final approval of their application by the Administrator. This provision was added several years ago to ensure that chapter 35 eligible children received a full 5 years in which to pursue their program of education. The amendments contained in clause 1 of this section extending entitlement from 5 to 8 years, renders the provisions of section 1712 (d) unnecessary. The subsections following section 1712(d) are redesignated to reflect the repeal of that subsection. Section 305 This section makes amendments, technical in nature, to section 1713 concerning application for chapter 35 benefits by a parent or guardian on behalf of an eligible person. As amended, the section clarifies that if the eligible person has attained the age of legal majority then the person may independently file an application on his or her own behalf. This technical change reflects provisions contained in subsection 1701 (b) which specifically equates, for the purposes of chapter 35, the definition of parent or guardian with any eligible person who has attained the legal age of majority and is under no known disability. Unnecessary or unwarranted gender references are also deleted. Section 306 This section amends section 1723 relating to the disapproval of enrollment in certain courses. Clauses 1,2 and 3 amend section 1723 (a) to add a new paragraph 4 which prohibits enrollment in any independent study program except one leading to a standard college degree. This clause simply codifies existing Veterans' Administration regulations and practice. A similar amendment to section 1673, for veterans training under chapter 34, is made by section 206 discussed supra. Section 307 This section amends section 1724 concerning discontinuance for un- satisfactory progress by specifying that, absent mitigation circurñ- stances, progress will normally be considered unsatisfactory at any time an eligible person is not progressing at a rate which wil] permit such person to graduate within the approved length of course based on the training time as certified to the Veterans' Administration. This section is intended to apply the same standards of progress as are applied to veterans by section 1674 of title 34 as amended by section 207 of this act. See additional discussion under section 207 supra. 1Q1~ PAGENO="0712" 3332 Section 308 This section amends section 1732 concerning the computation of educational allowances for institutional training for eligible survivors and dependents under chapter 35. New paragraph 3 is added to sec- tion 1732(c) which codifies existing regulations and practice regard- ing payment to an eligible person pursuing an "independent study program" leading to a standard college degree. Educational allow- ances for independent study programs are to be computed at the lesser of either the established tuition charge, including fees, or $292 per month. If independent studies are combined with resident training, and constitute a major portion of that training, then the regular monthly allowance of $292 is payable (increased from the current $270 by section 201(4) of this Act). New paragraph 3 directs that payment shall be computed at the rate prescribed in section 1682(e) (as added by section 208 of this Act). For additional information con- cerning the need for, and intent of, this provision see the discussion at section 208 supra. Section 309 Subsection (a) redesignates the title of chapter 35 as "Survivors and Dependents Educational Assistance" rather than the present "War Orphans' and Widows' Educational Assistance." Subsection (b) amends the table of chapters at the beginning of title 38 and the table of chapters at the beginning of Part III to reflect the amended chapter 35 title. Subsection (c) makes a technical amendment to section 1731 (a) by deleting reference to section 1780 and substituting a broader reference to chapter 36 where that section is found. Section 310 This section makes a number of technical amendments to chapter 35 to remove unwarranted and unnecessary gender references. The follow- ing sections are affected: 1700~ 1701, 1711, 1712, 1720, 1721, 1723, 1724, 1731, 1733, 1734, 1736, 1741, 1743, 1761, and 1763. TITLE IV.-POST-VIETNAM ERA VETERANS' READJUST- MENT ASSISTANCE ACT Section 401 This section provides that this title may be cited as the "Post-Viet- nam Era Veterans' Readjustment Assistance Act of 1977." Section 402 This section amends section 1652 to provide that no individual (with limited exceptions) entering the service on or after January 1, 1977, could accrue benefits under chapter 34. One exception provides that those individuals who had enlisted in the service under the Delayed Entry Program (DEP) prior to January 1, 1977, are eligible for chapter 34 benefits even though their active military duty does not commence until after that date. Such DEP personnel must have been enlisted or been assigned to a reserve component before January 1, 1977, and as a result of such enlistment commence active duty on or before January 1, 1978. Continued eligibility for chapter 34 benefits is, of course, contingent upon other qualifying factors including requl- `102 PAGENO="0713" 3333 site length of service and a release from active duty under conditions other than dishonorable. (The other exception concerning the reim- position of involuntary induction is contained in section 407 discussed infra.) Section 403 This section amends section 1661 (a) to limit the entitlement that each eligible veteran can accrue under chapter 34 to that period of time between commencement of active duty and the date of such eligible veterans first discharge or release from active duty after December 31, 1976. Section 404 This section would create a new chapter 32 educational benefits and readjustment assistance program for Post-Vietnam Era Veterans. The new chapter is more fully described as follows: Subchapter I-.Purpose; Definitions § 1601. Purpose This section states the purpose of this chapter is (1) to provide educational assistance to those entering the Armed Forces after De- cember 31, 1976, (2) to assist young persons in obtaining an education they might not otherwise be able to afford and (3) assist the all vol- unteer military program in attracting qualified men and women to serve in the Armed Forces. § 1602. Definitions This section prescribes various definitions which would govern the new program. The first defines which veterans are eligible for the new chapter 32 educational benefits. Requirements for eligibility for educational bene- fits remain the same under the current program except for the eligi- bility dates. In order to be eligible for chapter 32 benefits, a veteran must enter and serve on active duty for a period of more than 180 days commencing on or after January 1, 1977, and be released from active duty under conditions other than dishonorable. Veterans who enter service on or after January 1, 1977, and who are subsequently released from active duty with a service-connected disability are also eligible for the new chapter 32 benefits. Active duty would not include certain types of service such as service as a cadet or midshipman at one of the service academies, or certain service in the National Guard or Reserves. These are patterned after the limitations currently contained in chapter 34. The terms "program of education" and "educational institution" would have the same mean- ings as those currently set forth in chapter 34. The term "participant" is defined as a person participating in the new program. The requirement of discharge or release from active duty is waived in the case of any participant who has completed his or her first obli- gated period Of active duty beginning after December 31, 1976, or has served on active duty for 6 years-whichever period is less. Thus, par- ticipants in their second or subsequent enlistment are eligible for par- ticipation in the education program provided under this chapter. 4 participant is any person who has enrolled and who has not sub- se4uently disenrolled. In some instances it is important to distinguish - 103 PAGENO="0714" 3334 between an eligible veteran and a participant. For example, the defini- tion of eligible veteran includes only those who have been discharged or released from active duty under honorable conditions; participant covers only those who have enrolled in the plan and who have not subsequently disenrolled. Subchapter Il-Eligibility; Matching Funds § 1621. Eligibility Si~bsection (a) extends the right to enroll in the educational benefits program to any and all persons who enter the military on or after January 1, 1977. Whenever a person elects to enroll in the program and become a participant that person must contribute for at least 12 consecutive months before disenrofling or suspending participation. This requirement should ease the administrative burden of the De- partment of Defense and the Veterans' Administration. The Commit- tee expects that most participants will continue to contribute until they are discharged or released from active service or until they have con- tributed the maximum allowable contribution ($2,700). Subsection (b) provides limited exceptions to the general require- ment of 12 consecutive months of contribution. First, of course, a par- ticipant need not contribute for 12 consecutive months if the partici- pant is discharged or released from active duty prior to fulfilling that requirement. Second, an exception would also be made in instances of personal hardship as defined in regulations issued jointly by the Ad- ministrator and the Secretary of Defense. The Committee is aware tha.t in administering programs, instances occur when the need for the ad- ministrative ease assured by the consecutive month rule is outweighed by the need of an individual with a personal hardship. In this regard, the Committee expects that the implementing regulations will provide for the operation of equity. The Committee also recognizes that the personal budget of individual p'articipants is subject to fluctuation, and as such, flexibility is needed. In this regard, the Committee notes that an alternative to either suspension or d,isenrollment is a reduction in the amount the participant has elected to contribute each month. Subs~ction (c) permits each participant to suspend participation or disenroll from the educational benefits program at the end of any 12-month period. Participants are also permitted to disenroll or sus- pend participation prior to the end of any 12-month period of par- ticipation `in those instances of personal hardship. To the extent that contributions have been made, the individual who has suspended par- ticipation will remain entitled to educational benefits as computed by the formula in section 1631 (a) (2). The Committee anticipates that most participants will participate and contribute until the rJaximum allowable contribution has been reached. However, the Committee rec- ognizes that financial circumstances for individuals fluctuate and, to that extent. has made the program flexible by permitting partici- pants to suspend or disenroll at the end of any 12-month consecutive period. The Committee expects that any regulations in regard to the eligibility of suspending participants to make additional monthly contributions following suspension will be designed to encourage the participant `to resume the monthly deductions. The Committee has 104 PAGENO="0715" 3335 distinguished between `disenroilment (and the right to obtain a refund) and suspension (and the right to make additional monthly contributions). Suspension permits flexibility for participants in re- gard to monthly income flow, disenroilment signifies a desire to obtain accumulated equity. Of course, the additional monthly contributions which the suspended participant would be eligible to make subse- quently is limited by section 1622(a) ($50475 monthly). Subsection (d) provides that whenever a participant disenrolls, such participant forfeits entitlement for the matching funds outlined by section 1622. (A participant who only suspends participation does not forfeit entitlement for matching funds.) However, a disenrolled par- ticipant is eligible for a refund `of his contributions. Subsection (e) permits a participant who has disenrolled to reenroll in the program under such conditions as are prescribed jointly by the Administrator and the Secretary. § 1622. Contributions; Matching Funds Subsection (a) provides that contributions by those service persons who have elected to participate in the educational assistance program authorized by this chapter shall be made by deductions from such per- sons' military pay. The amount of monthly deduction from any indi- vidual's paycheck shall not be greater than $75 nor less than $50. Any amount between $50 and $75 may be elected `but the selected amount must be divisible by $5 ($50, $55, $60, $65, $70, and $75). The Sec- retary of Defense will deposit these deductions into a special educa- tional funding account in the U.S. Treasury. A maximum of $2,700 may be contributed by any one participant. The maximum of $2,700 could be accrued by a serviceman who has enlisted for 3 years if he were to contribute $75 each month of the 3- year enlistment. A serviceman with a 4-year service obligation could accumulate $2,700 by contributing $50 a month for the first 3 years and contributing $75 each month the fourth year. Subsection (b) of section 1622 specifies that unless otherwise pro- vided, a contribution made by a participant entitles such participant to matching funds at the rate of $2 for each dollar contributed by him. A participant who contributes the maximum $2,700 accrues a maxi- mum entitlement from the Veterans' Administration of $5,400. Thus, it is possible for such eligible veteran to accrue'a maximum of $8,100 (plus whatever amount may have been contributed by the Secretary of Defense pursuant to subsection (c) infra). Subsection (c) authorizes the Secretary of Defense to contribute to the fund of any participant, such contributions as the Secretary deems necessary or appropriate to encourage persons to enter or remain in the Armed Forces. The Secretary is also authorized to issue such rules and regulations as he deems necessary and appropriate to imple- ment this provision. The Committee expects that the Secretary will utilize this authorization "as a management tool to attract selected individuals" and as an inducement to high quality personnel whom the Secretary wishes to retain. In this regard, the conclusion of the Defense Manpower Commission that GI bill type educational benefits should be utilized as a "recruiting management program with benefits granted only on a selective basis to help meet critical skill needs" has guided the Committee in its determination of the need for this provision. 105 PAGENO="0716" 3336 The Committee recognizes that the post-service educational benefits now available through chapter 34 are, in the words of the Assistant Secretary of Defense, Manpower and Reserve Affairs, "a recruiting incentive". As such, the Committee believes that utilization of the educational inducements provided under chapter 32 will promote and assist the all volunteer military program in attracting and retaining qualified men and women to serve in the Armed Forces. The Committee believes that the new chapter 32, when compared to the existing program, will dramatically curtail costs while at the same time it gleans many of the benefits of the current educational assistance program. As the Defense Manpower Commission noted: "While the addition of educational benefits to the list of enlistment incentives would increase the costs of the AVF (All Volunteer Force), there would be an overall cost sav- ings to the Government and the taxpayers over the current costs of the universal educational benefits." An attractive feature of this pro- vision is of course that it permits the Armed Forces to utilize the new program "as a management tool to attract and retain selected indi- viduals". § 1623. Refunds of contributions upon disenroilment Subsection (a) of section 1623 provides that refunds of participant's contributions may be made if the participant has disenrolled from the program (or in accordance with the provisions of section 1624 if the participant has died). If a participant disenrolls, such participant is no longer entitl'~d to matching funds unless reenrollment is per- mitted pursuant to section 1621(e). Subsection (b) of section 1623 specifies that participants who dis- enroll prior to release or discharge from active duty are eligible for a refund of their contributions on the date of discharge or release, or within 60 days of the receipt of notice by the Administrator of such participant's disenroliment, whichever date is later. The Committee has included the "whichever is later" provisions in order to avoid administrative difficulty by allowing sufficient time for the refund of the participant's contributions. A refund may be made earlier than the date of discharge in instances of hardship or for other good reason. The Administrator of Veterans' Affairs and the Secretary of Defense are required to issue regulations jointly prescribing and defining those instances which constitute hardship or other good reason sufficient to justify an early refund. The Committee intends that any participant seeking to disenroll will be informed of the conse- quences and ramifications of disenrollment and the procedures which the disenrolling participant must follow if he believes that he is en- titled to an early refund as a result of a personal hardship or other good reason. Subsection (c) of section 1623 stipulates that a participant who has disenrolied from the program following discharge or release from active duty will be refunded the amount of his contributions within 60 days of receipt of an application for a refund from the participant. The "60 days" reauirement is established as the maximum time period for refund. If it is administratively feasible for a refund to be made more quickly the Committee encourages such payment. 106 PAGENO="0717" 3337 Subsection (ci) allocates the disposition of contributions made by the Secretary pursuant to section 1622(c) in the event the participant dies, disenrolls, or is disenrolled from the program prior to utiliza- Defense. Step four divides the total derived from steps 1, 2, and veteran's unused contributions. The Veterans' Administration is re- funded to the Secretary. § 1624. Death of participant Subsection (a) of section 1624 provides that if a participant dies, such participant's unused contributions to the fund will be paid to the beneficiary of the participant's Service Group Life Insurance policy. If the participant is not insured under SGLI, or if no bene- ficiary has been designated by the participant, such participant's con- tributions will be refunded to the participant's estate. § 1625. Discharge or release under conditions which would bar the use of benefits Section 1625 provides that a participant is automatically disenrolled from the program if such participant is discharged or released from active duty under conditions which would bar th~ use of the educa- tional benefits. Benefits would be barred if the participant fails to serve on active duty for `a period of more than 180 days unless such veteran was discharged for a service-connected disability. The veteran must also be discharged or released from active duty under conditions other than dishonorable. Automatic disenroliment, of course, results in the participant's loss of entitlement to educational benefits. The partici- pant's contributions will be refunded within 60 days of the date the Administrator receives notice of such discharge or release or the date of discharge, whichever is later. Subchapter III-Entitlement; loan eligibility § 1631. Entitlement; Loan eligibility Subsection (a) of section 1631 entitles a participant to a maximum of 36 monthly benefit payments, or their equivalent in the event the eligible veteran receives part-time benefit payments. The 36 months of entitlement makes it possible for an eligible veteran to receive educational benefits over a period of 4 academic years (9 months a school year). Computation of the amount of part-time benefits for which an eligible veteran may be entitled is done in accordance with section 1788 (Measurement of courses) of chapter 36. The formula for determining monthly assistance totals is as fol- lows: First, all contributions made to the fund by the eligible veteran are added together; second, the sum of such contributions are multi- plied by three; third, all contributions made to the fund by the Secre- tary of Defense pursuant to section 1622(c) are added; and fourth, the total derived from steps 1, 2, and 3 is divided by 36 or the number of months the eligible veteran has made contributions to the plan, whichever is less. The first step of the formula determines the amount the eligible veteran has contributed. Section 1622(a) limits participant contributions to a maximum of $2,700. The second step of the formula determines the total educational entitlement resulting from the partic- ipant's contributions. Multiplying the. participant's contributions by 107 PAGENO="0718" 3338 three results in a total representing the participant contributions and resulting VA matching funds. The third step adds all contributions made to the fund on behalf of the participant by the Secretary of Defense. Step four divides the total derived from steps 1, 2, *and 3 by the lesser of 36 or the number of months in which the partici- pant has made contributions. If an individual has contributed for less than 36 months then the number of months that he has made contri- butions will be the. figure used to divide the totals from steps 1, 2, and 3. If a veteran is enrolled in a program of education which is less than full-time, the total to which he is entitled would be accord- ingly reduced. A veteranwho has contributed the maximum would at a minimum (not counting any contribution by the Secretary of Defense) receive $225 a month in educational assistance benefits. The veteran would also be entitled to a maximum VA education loan in the amount of $2,000 a year. Except as provided in paragraph 4 of subsection (a), only dis- charged or released eligible veterans are eligible for receipt of the educational benefits provided by this program. In this connection, the Committee recognizes that the continued high unemployment rates of Vietnam era veterans is indicative of the continuing readjustment difficulties of the recently discharged. Whenever veterans have sought to reintegrate into civilian life, readjustment difficulties have occurred. The Committee expects that the readjustment difficulties which will be faced by future separatees will be eased by the new chapter 32 program. However, participation in the educational benefits program after release from active duty is, of course, contingent upon contributions by the participant while the participant is in the service. Thus, the Committee regards the outreach program required by section 1643 to be of utmost importance. An eligible veteran who has completed either the first obligated period of active duty or 6 years of service, whichever is lesser, is also eligible for receipt of the educa- tional benefits provided by this program. Subsection (b) of section 1631 extends eligibility for participation in the Predischarge Education Program (PREP) to only those mem- bers of the Armed Forces who are participants in the chapter 32 program. The general entitlement for PREP enrollment as author- ized in chapter 36 is terminated for those who enter the service after December 31, 1976. A person who has suspended participation is con- sidered a participant for the purpose of this provision. Individuals entitled to chapter 34 benefits however remain eligible for enrollment in PREP. The Committee expects that the Veterans' Administration and the Department of Defense will affirmatively advise and counsel enlistees of the existence and purpose of the PREP program and the require- ment that enrollment in the PREP program is contingent upon participation in the chapter 32 program. The Committee believes that limiting eligibility for PREP to only those servicepersons who are enrolled in the chapter 32 program will ensure that the original purpose of the PREP program (that is placing prospective veterans in a position to use their postservice benefits effectively) will be met. Subsection (c) of section 1631 provides that an eligible veteran pur- suing a program of education by correspondence or a program of flight 108 PAGENO="0719" 3339 training will have entitlement charged in the same manner as corre- spondence courses and flight training courses are currently charged under section 1786 of chapter 34. The Committee has allowed 100 percent of the cost of instruction in such courses to be charged against a person's entitlement rather than 90 percent as Presently authorized in chapter 34 because up to one-third of the entitlement which will be charged against the veteran will be the personal contributions the veteran has made to the fund. Subsection (d) of section 1631 provides that eligible veterans under chapter 32 shall be entitled to participate in the VA direct education loan program established in sections 1798 and 1799. Currently eligible veterans under chapter 34 are entitled to a maximum loan of $600 per academic year (increased to $2,000 by section 502 of this Act disctissed infra). The total borrowed may not exceed the maximum entitlement total for which the veteran is eligible. The Committee believes that the educational loan program as expanded and liberalized by the reported bill will assist eligible veterans under chapter 32 in obtaining an education and is particularly important since the maximum benefits under this program are less than the maximum benefits for which veterans are currently entitled under chapter 34. The Committee is thus concerned that the loan program operates in an effective manner which provides genuine assistance to veterans. § 1632. Durations; Limitations This section provides that an eligible veteran is not entitled to edu- cational assistance after 10 years of the date of the veteran's last dis- charge or release from active duty. This 10-year "delimiting" period is identical to that currently available to veterans under chapter 34. If an eligible veteran has not utilized any or all of his entitlement at the end of the 10-year period, such veteran is automatically deemed disenrolled. As such, the veteran is entitled to a refund of any of such veteran's unused contributions. The Veterans' Administration is re- quired to notify such veteran who must then apply for the refund of his unused contributions. The Committee expects the Veterans' Ad- ministration to make a good faith effort to locate all veterans who are entitled to such refunds including personal notification at the veteran's last known address. If no application is received within 1 year of the date of notice, it will be presumed for the purposes of section 725s of title 31, that the individual's whereabouts is unknown. As a result of such determination, the funds to which the individual is entitled will be transferred to the trust fund within the Treasury established at section 725p of title 31 and designated "Unclaimed Moneys of Individuals Whose Whereabouts are Unknown." Subchapter IV-.-Adminlstration § 1641. Requirements This section specifies the provisions of current law which shall be in effect for the new chapter 32 educational benefits program. In gen- eral, the provisions of chapter 36 are applicable except for those sec- tions specifically excluded. Specific sections within chapter 34 are ap- plicable as stipulated. The following sections from chapter 34 apply to the chapter 32 educational benefits program: Section 1663 (Educa- 109 PAGENO="0720" 3340 tional and Vocational Counseling); section 1670 (Selection of Pro- gram); section 1671 (Application; Approval); section 1673 (Dis- approval of Enrollment in Certain Courses); section 1674 (Discon- tinuance from Unsatisfactory Conduct or Progress); section 1676 (Education Outside the United States); section 1677 (Flight Train- ing) ; section 1681 (c) (Educationa' Assistance Allowance-Flight Training) ; section 1683 (Approval of Courses) ; section 1685 (Vet- erans Student Services) ; and sections 1695-1698 (Pre-discharge Education Program (PREP). General eligibility for PREP is termi- nated for those who enter the service after December 31, 1976. How- ever, under section 1631 (b) of chapter 32 any member of the Armed Forces who is participating in the chapter 32 benefits program is eligible to participate in the PREP program. Chapter 36 of title 38, Administration of Educational Benefits, is, in general, applicable to the new chapter 32 and the governance thereof. Those sections of chapter 36 which are specifically not applicable in- clude sections 1777 (Approval of Training on the Job), section 1780(c) (Certifications of Apprenticeship and Other On-Job Training), and section 1787 (Apprenticeship and Other On-Job Training). The new chapter 32 will utilize the same administrative framework that currently exists for the administration of chapters 34 and 3~ benefits. In most instances, the same programs of education for which veterans under chapter 34 and eligible spouses and dependents under chapter 35 are eligible will be authorized in chapter 32. Eligible veterans under chapter 32 also remain eligible for participa- tion in the workstudy program pursuant to section 1685 and, as noted previously, the VA direct educational loan program pursuant to sec- tions 1686, 1798, and 1799. § 1642. Outreach efforts Section 1642 requires the Administrator to designate an appropriate official to work with a similarly selected official from the Department of Defense in carrying out an effective outreach program. The purpose of the outreach program is to acquaint all persons entering or consid- ering entry into the Armed Forces of the benefits and advantages of the chapter 32 program. This Committee strongly believes in the value to young men and women, as well as to the Nation as a whole, of the educational oppor- tunities presented by this program. Accordingly, the Committee em- phasizes its intention that this outreach program should be extensive. Often, those who are most in need of educational assistance (and, often, those most in need of competent information in this regard), are those who are least aware of advice and counsel concerning potential entitlement to governmental benefits and services. The Committee emphasizes that each enlistee and each future enlistee must know of the benefits available to him and must be able to make a reasoned choice in regard to participatiop in the educational benefits program. It is the Committee's belief that an effective outreach program by the Department of Defense and the Veterans' Administration will be of benefit in inducing qualified young men and women to join or re- main in the armed services. 110 PAGENO="0721" 3341 § 1643. Report requirements This section requires the Administrator and Secretary to submit a joint report to the Committee on Veterans' Affairs within 90 days of enactment of this chapter (that is, on or before April 1, 1977) con- cerning their plans for implementation of the Post-Vietnam Era Veterans Readjustment Assistance Program. The report should be of sufficient detail to enable the Committee to determine if the intent of the law, as specified in the statute in the accompanying Committee report, is being carried out fully. This section also requires annual reports to the Committee detailing operations of the program (includ- ing outreach efforts) which also should be sufficiently comprehensive and specific as to enable effective oversight of the program by the authorizing Committees. In this connection, the Committee intends that the report include information as to the number of participants granted bonuses by the Department of Defense under section 1622(c). The Committee also is interested in information as to utilization pat- terns broken down by service and any less classifications. § 1644. Deposits; Report This section requires the prompt transfer from the Secretary to the Administrator for deposit into the fund of the deductions made from the military pay of participants. Each month, the Secretary of De- fense shall forward to the Administrator of Veterans' Affairs a monthly report giving the name and service number of each initial enrollee participant, the amount of the deduction from the military pay of such enrollee, any contributions made by the Secretary pur- suant to section 1622(c) and any changes in each participant's enroll- ment and/or contribution. This reporting provision is designed to assure effective administration and close coordination between the Department of Defense and the Veterans' Administration. Section 405 This section would amend the table of chapters at the beginning of title 38 and at the beginning of part III of title 38 to reflect the addition of the new chapter 32 commencing with section 1601. Section 406 This section establishes January 1, 1977, as the effective date of eligibility for participation in the chapter 32 program. This com- mencement date of the new program corresponds with the Decem- ber 31, 1976, termination date for eligibility for educational benefits under chapter 34 provided under section 401 of this act. Those who enter the Armed Forces for active service on or after January 1, 1977 (with certain exceptions for those enrolled in the Delayed Entry Program), will be eligible only for chapter 32 benefits. Section 407 This section provides for the reinstitution of eligibility for chapter 34 educational benefits in the event legislation providing for the in- voluntary induction of persons into the Armed Forces is enacted. The Committee is mindful of the cold war GI bill which extended educational entitlement benefits to those who served the country fol- lowing the Korean conflict and prior to the Vietnam era (that is, 78-226 0 - 77 - 46 (Pt.4) PAGENO="0722" 3342 January 31, 1955 to August 4, 1964). During that period of time, invol- untary induction assured that the services maintained necessary man- power requirements. In extending benefits to those who served when there was no active war, Congress acknowledged both the danger and tentative nature of "peace" during the last half of the 20th `century as well as the need for readjustment benefits of those subject to involun- tary induction. The Committee is also aware of the difficulties encountered in at- tempts to adopt that GI bill as poignantly portrayed by H. R. Rain- water, Commander in Chief of the Veterans of Foreign Wars, in testimony before this Committee in 1971: the record is replete and continuous respecting our efforts to help post-Korean veterans. It was back on Janu- ary 31, 1955, that the Korean 01 bill was ended by Presi- dential proclamation. The following August the delegates to our national convention expressed their unanimous dis- appointment and disagreement with this position when it called upon the President and the Congress to continue 01 bill benefits for those citizens who were making the extra sacrifice by serving in the Armed Forces during the cold war. Subsequently1 our organization was the first major veterans' organization to go on record to advocate what was then called the' cold war C-I bill. It was here in the Senate that we found a valiant spokesman in favor of this VFW goal-Senator Yarborough of Texas. He was to be the Senate leader in behalf of our efforts in this regard. Opposition to a cold war C-I bill came from many sources. However, the Vietnam war changed everything respecting this program. Even then it was a watered-down C-I bill compared with previous C-I bills. Thus, the Committee believes providing for noncontributing GI bill benefits in the event involuntary inscription is enacted in the future is consistent with past practice and the congressional intent of the cold war C-I bill. Any individual entering military service on or after the effective date of the law requiring involuntary induction will be eligible for the educational benefits provided by chapter 34. However, such en- trants would not be eligible for participation in the chapter 32 program. For those serving on active duty on the effective date of the rein- stitution of involuntary induction und participating in the chapter 32 program, this section permits the participant the right to elect either the chapter 32 program or the chapter 34 program. The Ad- ministrator and the Secretary are authorized to prescribe jointly such regulations as may be necessary to implement the section. The section requires that `any eligible participant be apprised of the right to elect between the two programs. The Committee expects that notice to each participant will include the advantages and disadvantages involved in selecting either program. An election between chapter 32 and chapter 34 is irrevocable only after the electing participant has received a benefit payment under one 112 PAGENO="0723" 3343 program or has received a refund of his contributions to the matching fund. Until such time, the veteran is free to change his election from one program to the other. Should the veteran decide to come under chapter 34, he is auto- matically deemed to have disenrolled under chapter 32 and become eligible upon application for a refund of his contributions to the matching fund pursuant to section 1623. Most participants will prob- ably find it to their advantage to choose the chapter 34 program rather than continue participation in the chapter 32 program. How- ever, there will be instances when it will be to the advantage of the veteran to elect the chapter 32 program. For those who elect chapter 34, entitlement accrues from the effec- tive date of t'he legislation enacting the involuntary induction. TITLE V-CHAPTER 36 EDUCATION LOAN AND PROGRAM ADMINJSTRATION AMENDMENTS Section 501 This section provides 8 percent increases in the benefits payable to those training by correspondence or enrolled in apprenticeship or other on-job training. Clause I amends section 1786 (a) authorizing the pursuit of educa- tion by correspondence to provide an increase in the benefits consistent with the increases in educational assistance allowances made by the reported bill. Accordingly, the period of entitlement of any veteran or other eligible person is to be reduced by 1 month for each $292 (cur- rently $270), paid to the veteran or eligible person for such course. Clause ~ amends section 1787 (b) to provide an 8 percent increase in the monthly training assistance allowances payable to veterans or other eligible persons pursuing a full-time program of apprenticeship or other on-job training. The following table shows a distribution of trainees by occupation: TABLE 28.-VIETNAM ERA VETERANS PARTICIPATION IN APPRENTICESHIP AND ON-JOB TRAINING, BY FIELD OF TRAINING (OCTOBER 1967-JUNE 1975, CUMULATIVE) Apprentice Field of training training Other on.job Total Technical and managerial 3, 429 49, 592 53, 021 Clerical and sales 1, 217 11, 195 12, 412 Service 5, 429 46, 465 51, 894 Farming, fishery, forestry and related 299 3, 136 3,435 Trade and industry 181, 004 82, 755 263, 759 Miscellaneous 7, 934 8, 474 16, 408 Total 199,312 201,617 400,929 For a veteran with no dependents, the monthly assistance allow- ance for the first 6 months of training is increased from $196 to $212. Married veterans would receive $238, up from the current $220. The addition of a child boosts the rates from $240 to $260~ with $11 for each additional dependent. Training allowances for the second and third 6-month periods would be increased respectively to $159 and $106 from the current allowance of $147 and $98. The assistance rates for the fourth and any succeeding 6-month period 113 PAGENO="0724" 3344 would be increased from $49 to $53 per month. Proportional increases for veterans with dependents would also be provided. The Veterans~ Administration estimates that 110,540 veterans will train at a first year additional cost of $14.0 million, decreaseing gradually to 78,870 vet- erans and a cost of $9.6 miflion in the fifth year, all as reflected in the following table: TABLE 29-8-PERCENT INCREASE FOR APPRENTICESHIP/OJT Trainees Cost (millions) Fiscal year: 1977 110,540 $14.0 1978 82,790 11.7 1979 81,530 11.0 1980 80, 220 10. 2 1981 78,870 96 5-yrtotal ~i~ii~_ 56.5 Section 502 This section liberalizes and expands the VA direct educational loan program provided for in subchapter III of chapter 36. First author- ized by the Vietnam Era Veterans' Readjustment Assistance Act of 1976 (Public Law 93-508), this program authorizes supplementary assistance of up to $600 a school year to veterans and eligible depend- ents by direct loans to them from the Veterans' Administration to cover educational costs not otherwise provided under title 38 or other Federal loan or grant programs. Both eligible veterans and eligible persons training under chapter 35, either enrolled on at least a half- time basis in a course leading to a standard college degree or enrolled in an approved professional or vocational objective course of at least 6 months duration are eligible for a loan of up to $600. Such a loan is available only if the veteran or eligible person is unable to obtain the additional assistance needed through the Guaranteed Student Loan Program administered by the Department of Health, Educa- tion, and Welfare. Applicants must establish that available financial resources (including guaranteed student loan funds) are not sufficient to meet educational costs. Currently the interest rate for VA educa- tional loans is 8 percent per annum on the unpaid balance. No intei'- est accrues on the. loan balance until the beginning date of repayment. A loan fee (currently 3 percent of the loan amount) is deducted from the loan in order to establish an insurance fund for defaults. Repay- ment may be made in semiannual, quarterly, or monthly installments (there is no penalty for repaying in advance all or any part of the loan). Repayment begins 9 months after veteran or eligible person ceases to be a half-time student. A veteran or eligible person has 10 years to repay the loan. Repayment of both principal and interest is deferred during any period when the veteran or eligible person is enrolled on a half-time or greater basis under the GI bill. When the program was originally enacted in the waning days of l974~ the Veterans' Administration estimated that in fiscal year 1975 and in fiscal year 1976 a. combined total of nearly 261,000 veterans would be unable to secure funds from other Federal loan programs and would receive direct VA education loans. In fact, the cumulative loan program experience in the past 2 years has been that only 12,188 loans PAGENO="0725" 3345 or 4.7 percent of tne number originally estimated by the VA have been made. Even more startling than the small number of loans granted is the high percentage of those applications which have been denied. Nearly 42 percent of all applications were denied, as reflected in the following table: TABLE 30.-VA EDUCATION LOANS Fiscal year 1975 Fiscal year 1976 l-rtgtarn cumulative AppitcaLiutis received Loans approved Loans granted (paid) Total obligation (thousands) 6,9~9 3,181 2,740 $1,458 13,781 9,007 9,236 $5,107 20,780 12,188 11,976 $6,565 Hard data as to the reasons wiry the program is not functioning as expected by both Congress arid the administration is generally not available because of the almost total failure of the Veterans~ Admin- istration to gather any meaningful data about it. Indeed, apart from knowing the number of applications, the numnoer of loans granted and the amounts of these loans, the Veterans' Administration has informed the Conrniittee that it had no other data. Subsequent to Senate hear- ings in October, 1975, a general request was made by various regional officies for an analysis of the education loans which has been granted. According to the information received from the regional offices~ lack of financial need was cited as the reason for denial in over 60 percent of the cases. Without additional data to assess the financial situa- tion of those who were denied loans, the Committee is unable to de- termnine the propriety of the denials and the extent to which admninistrat;ive antipathy IG the program may have resulted in the application of unduly stringent criteria. Rather, more pertinent is the testimony of the Chief Benefits Di- rector of the Veterans' Administration, before the House Committee on Veterans' Affairs earlier this year, in which he said: The education loan program which went into effect on January 1, 1976, has not been as popular a program with vet- eraris as we had anticipated. One reason for this general lack of interest is, we believe, the fact; that the amount available ($600) per academic year is relatively low. Just as a point of comparison-2 months of full-time assistance allowance for a single veteran yields $540. Also, the requirement to list at least two lenders who refused to make a loan under the guar- anteed student loan program may serve to `inhibit application for the program. In the absence of specific data to the contrary, the Committee is inclined to accept the admissions of the Chief Benefits Director that the low amount of the loan and Government. red tape culpable for the low program participation. Accordingly, the reported bill would in- crease the basic amount of the loan to $2,000, a figure identical to that which unanimously passed the Senate in 1974. This section also pro- vides that the basic interest rate charged on the loans shall be com- parable to and not exceed the interest rate charged with respect to `1~5 PAGENO="0726" 3346 other Federal insured student loans. At present, veterans are paying slightly higher interest than is paid on other Federal loans. To assure proper operation of the program, the Committee also in- tends that the Veterans' Administration revise its regulations so that the procedure for obtaining a VA loan does not tend to inhibit those who, in fact, are eligible and entitled to them. In this connection, the Committee expressly intends that certification by a school loan officer that other federally insured loans are not generally available to the veterans in the area of the school will satisfy the current requirement of specific "turn downs" by approved lenders. In this connection, the Committee is aware that students, including veterans, face increasing difficulty in obtaining loans through the. guaranteed student loan program. The report of the American Bank- ers Association student loan task force, issued in March 1975, for ex- ample, found that "the opportunity cost of placing available funds into higher yielding, relatively riskless investments clearly makes stu- dent loans an expensive community service for the average bank.". The report noted that for the first 3 months of fiscal year 1975, the number of loans made was 27 percent less than the same period of 1972 and, despite inflation, the amount loaned was 26 percent. A sur- vey of lenders and borrowers in the guaranteed student loan program, prepared for the Office of Planning, Budgeting and Evaluation in the Office of Education of the Department of HEW (May 31, 1975), found that: GSLP has not evolved into a student aid program acces- sible to all students. Legislation and OE regulations aside, large numbers of lenders have introduced additional con- straints on student eligibility. For example, some restrict loans to existing customers, do not give loans to first-year students, do not give loans to vocational school students, or prohibit loans to students holding GSLP loans from other * lenders. Their rationale for imposing these constraints reflects their judgment that the student or program is best served by not granting some loans and that lender funds must be rationed in any program operating at a net loss. The survey also found that 62 percent of the lenders always (and another 9 percent frequently) determine whether or n9t the applicant or his family was a current customer, a determination which the report concluded, "implies a requirement (or at least a strong preference) for this status for receiving an approved loan." The survey also observed, what was termed, a geographic effect. That is, it said: Within a specific lending market area (e.g., a city or SMSA), if one lender limited GSLP loans to customers, the other lenders tended to do the same. Their rationale was that otherwise a more liberal lender would end up with more than its share of GSLP loans, which, by their claim, was unprofita- ble for each loan. Data submitted by the administration, with respect to this year's budget, also indicates that in the coming academic year, the number of loans will declme from 834,000 to 500,000 (and that the average loan will decline from $690 to $500). Thus, it was not surprising that 116 PAGENO="0727" 3347 the House Committee on Education and Labor, in its report accom- panying H.R. 1407 (H. Rept. No. 94-1232), found that "in many parts of the country, it is becoming increasingly difficult for a family to secure a guaranteed loan at all from their local banker." Accordingly, the Committee places much greater emphasis on the VA direct loan for those veterans attending higher cost institutions who will require loans in addition to the VA monthly educational assistance allowances in order to meet educational and living expenses. Difficulties in obtaining guaranteed student loans by all students make it all the more important that the VA direct loan program be an efficient and accessible program making loans to those entitled as intended by Congress and this Committee. Section 503 This section amends subchapter I of chapter 36 relating to State approving agencies by increasing the amounts payable for reimburse- ment of administrative expenses and allowing, in appropriate in- stances, subcontracting by State agencies. Clause I amends section 1774(a) to permit the Administrator to also reimburse agencies for work performed by their subcontractors when the work has a direct relationship to the educational assistance programs authorized by title 38 and has the prior approval of the Administrator. The Committee is aware that the complexities of verifying compli- ance with the numerous requirements of chapters 34, 35, and 36 may augur for the use of subcontractors who possess the expertise to ascer- tain if institutions are in compliance with some of their requirements. The Committee understands, for example, that certain subcontractors may be more readily able to ascertain with greater precision if institutions are in compliance with that section (1673 (a) (2)) requir- ing institutions to demonstrate that at least half of the persons who completed vocational courses obtained employment in the occupation for which trained. Use of subcontractors here, or in other areas where State approving agencies are either less equipped or less inclined to ascertain verification rigorously, will be of benefit not only to the agency but also to the Veterans' Administration and the taxpayers as well. Claw?e 2 amends section 1774(b) to increase by 8 percent the allow- ances payable by the Administrator for administrative expenses in- curred by State approving agencies in administering educational bene- fits under chaptres 34 and 35. In 1968. `Congress amended section 1774 ~o provide, in addition to reimbursement for necessary expenses of salary and travel, that the Veterans' Administration would also pay an allow-ance, to the State agencies for the fair share of their adminis- trative expenses as well. The amount payable, which is found in a formula contained in subsection (b), is determined by the size of the contract between the Veterans' Administration and the individual State for the amount of ~xpenses authorized in section 1774(a~). Testi- mony by representatives of the National Association of State Approv- ing Agencies, in 1972, that the allowances provided under subsection (b) covered only 48 percent of the actual cost of administering the program led Congress to double the allowance in Public Law 92-540. Amendments contained in the Vietnam Era Veterans Readjustment 117 PAGENO="0728" 3348 Assistance Act of 1974 (section 210(1) of Public Law 93-508) pro- vided additional ~cost-of-living increases. The amendment contained in clause 2 would provide such increases as are consistent with those made throughout the reported bilL Section 504 This section amends section 1775 relating to the basic approval of accredited courses, to clarify and codify institutional responsibility with respect to recordkeeping and to require schools enrolling veterans to specify their policies with respect to standards of progress. The need for specific institutional standards of progress results, of course, from the fact that payment to an eligible veteran is condi- tioned upon such progress and must be discontinued promptly by the Veterans' Administration if not met. During the past year, increased VA compliance surveys of institutions of higher learning have re- vealed many instances where schoo1s did not maintain accurate, cur- rent or complete records of the academic progress of veterans enrolled therein. FurtherS many schools have such vague or virtually non- existent standards of progress that it is difficult, if not impossible, to determine at what pointin time educational benefits to veterans should be discontinued. Responding to this problem, the Veterans' Adminis- tration revised their regulations last year to clarify and reemphasize long-standing policies with respect to satisfactory progress and ade- quate records. The amendments adonted in this section are intended to codify and further clarify this policy. C7ause 1 amends section 1775 (a~ to recrnire that the catalog or bulletin of the educational institution must be certified by an author- ized representative of the school as being true and correct as to content and policy. Such catalog or bulletin must also snecifically state the school's progress requirements for completion of the course. The certi- fied information. currently required of certain schools by section 1776 (h~ (6'~ and (7). would he applied to ~ll institutions including ac- credited schools. At a minimum, the certified catalog or bulletin must include information as to institutional policy and regulations relative to standards of progress required of the student by the institution. This policy must define the grading system of the institution, the minimum grades considered satisfactory~ conditions for interruption for unsatisfactory grades or progress and a description of the proba- tionary periód~ if any, allowed by the institution, as well, as the condi- tions for reentry for those students dismissed for unsatisfactory progress. A statement regarding progress records kept by the institu- tion must he made and furnished to the student. In addition, institu- tional policy and regulations. relating to student conduct and condi- tions for dismissal for unsatisfactory conduct, must be included in a certified catalog or bulletin. C7aw~e 2 amends section 1775 (b'~ to reauire that as .a condition of ap- proval of an accredited schools the St~te approving ageilcy must find that the records showino' progress of the student include, at a mini- mum, the same information now required of those schools covered under section 1776(c~ (7) o~ title 38 (with the exception of attend- ance). The Veterans' Admiiiistr~~t~on. whi'h favors the prono~ed chanoes, states that they would "aid in curtailing a number of abuses which have occurred in the program." The Veterans' Administration 118 PAGENO="0729" 3349 believes cost savings will result, but it has insufficient data upon which to base any estimate. Section 505 Three substantive changes to section 1780(a) of title 38 are made by this section. The first adds a new clause 3 which provides that the Administrator shall not pay benefits to any eligible veteran or person for auditing a course. This provision simply clarifies and codifies long standing VA policy interpretation of existing statutory author- ity. In 1971, the director of the Compensation Pension and Education Service restated the position of the Veterans' Administration suc- cinctly when, in written response to a question posed by a regional office director, he said: Auditing a course generally involves all of the privileges of a student in a course without incurring the obligations of completing the required course work. Usually an auditor may attend all the lectures for a course, but he is not required to complete any assignments or take examinations. Stu- dents do not receive any credit for courses they have audited because they have not completed the course work. In effect, auditors do not take a course but merely attend lectures. A course which is being audited ma~y not be considered for payment purposes either as a noncredit deficiency course or as a credit course. Section 1780(a) is fuither amended by adding a new clause 4 pro- hibiting payment of educational assistance benefits to veterans or chapter 35 eligible persons for those courses in which the grade as- signed is not used to compute the requirements for graduation (includ- ing a course from which the student withdraws) unless the Admin- istrator finds that there are mitigating circumstances which would permit payment. The increasing permissiveness of the educational community with respect to class attendance and non-punitive grading and withdrawals, unfortunately, presents an unparalleled opportunity for substantial abuse by certain veterans. Often, a veteran can enroll in an institu- tion and never set foot inside the classroom until the last day of the semester when he is permitted to withdraw without penalty. The following semester, he is allowed to repeat the process all over again while receiving VA benefits month after month. Established over- Payments for some individual veterans are in excess of $12,000. In one instance, `a veteran received VA benefits for attempting over 120 credit hours and, yet, had received grades used in computing the require- ments for graduation for only 8 hours. In another insLance, a report following an inspection of a midwestern college by the state approving agency stated: I conducted an inspection regarding the progress records of 32 veterans who are presently attending or recently attended [name of school deleted]. The inspection indicated that a grading policy authorized by the school is being abused to the extent that veterans are registering for courses, do not complete the work assigned, so they receive an NC (no credit) grade at theend of the quarter, and yet receive their 119 PAGENO="0730" 3350 GI benefits for nonacademic achievement. Example: A vet- eran registered for courses in fall, 1973 (12 credits); winter, 1974 (14 credits); spring, 1974 (12 credits); total 38 credits. The veteran received all NC grades or zero (0) credits earned out of a possible 38 credits, received his GI `benefits (12 credits per q~uarter considered full-time) and is still al- lowed to continue enrollment in the school even though this student demonstrated nonacademic achievement. * * * In re- viewing the 1974-197G catalog * * * the grades are described as follows: A, B, C, D, W, NC, P, V. There is no failing mark such as Ti or F. Therefore, it is presently impossible for a student to be dismissed because of failing grades. Certain institutions (often those who receive state assistance based upon the number of enrolled students) apparently are either unaware or unconcerned that such practices are occurring. Veterans' Admin- istration compliance surveys of institutions of higher learning con- ducted during the past year reveal that the abuse is apparently wide- spread. An audit of 6,455 veterans records at one community college disclosed discrepancies in 2,771 cases, (43 percent) resulting from mis- use of the "W" (withdrawn) grade. At another institution, following questions raised by the Veterans' Administration, the institution con- ducted a close examination of students records for the first time. The examination resulted in the determinations of unsatisfactory progress for 1,029 of its 3,000 enrolled veterans. A staff report of the House Ap- propriations Committee released on March 5, 1976, concerning VA overpayments concluded that: It is certain there are many more cases yet undiscovered, because the conditions in the VA and the schools make abuses of the education program easy. There are no certifications of attendance to say whether veterans are attending classes, nor is there rolltaking. There is shoddy recordkeeping and a grading system that permits the student to continue enroll- ment without learning anything or making `any progress. Undoubtedly, there are abuses nobody knows about yet. The Committee concludes (particularly in the absence of attendance certification requirements such as those required of Korean conflict GI bill trainees that failure to take a course to a final grade which will be used in computing the requirements for graduation, presents both an enormous potential for abuse and avoids basic Congressional intent. Such situations do not differ fundamentally from auditing courses for which the VA has traditionally refused payment. The Administrator is granted authority under this section, how- ever, to waive the requirements of this provision if `he finds there are mitigating circumstances. While the Committee expects the VA to enforce the provisions in a manner which eliminates Federal payments to those not seriously pursuing an education, it also intends that the waiver authority be exercised with compassion and with an under- standing of the domestic difficulties and the problems often encoun- tered by educationally disadvantaged veterans making a serious at- tempt to obtain an education. The Committee would also hope that schools would exhibit greater concern for the successful pursuit of studies by educationally disadvantaged veterans including for example 120 - PAGENO="0731" 3351 securing, where appropriate, VA financial tutorial assistance, pur- suant to section 1692 of title 38 (as liberalized and expanded by sec- tion 210 of this Act). The third substantive amendment of this section adds a new clause 5 prohibiting payment of VA benefits for a program of education by correspondence (or the correspondence portion of a combined cor- respondence.residence course) when the normal completion time of the course is less than 6 months. Tinder the amendment, institutions will be required to certify to the. Administrator the normal period of time required to complete the course. Training by correspondence is paid at the rate of 90 percent of the cost of the course without limit. Residence training is paid at a monthly rate of $270 ($292 under the reported bill). Veterans' Administration policy, permitting combined corre- spondence-residence courses has given rise to a number of abuses. In a typical case, a combined correspondenc,eresidence course is developed for a vocational objective-such as long-haul truck driver or heavy construction equipment operator. The cost of such courses typically range from $1,000 to $2,500. The residence portion of the course (which generally imparts whatever real skills the course provides) usually lasts no more than 2 to 3 weeks. The correspondence portion, is often of questionable value and is usually completed very quickly. For example, the Veterans' Administration has informed the Com- mittee that their records reveal that the correspondence portion of such courses are often completed in a week or so and that there are numerous instances in which the correspondence portion is completed on the same day that the veteran enter training. In a number of cases, there have been allegations that the course salesman actually com- pletes the correspondence portion of the course for the veteran. Com- mittee staff members found no difficulty in completing a $1,000 corre- spondence portion of a course in a few hours time. What has happened, of course, is that the major cost of the course has been charged (or "front loaded") to the correspondence portion of the course in order to take advantage of that provision of law which permits payment at the rate of 90 percent of its cost. The Veterans' Administration, in reporting favorably on this section's amendment outlined in this section, told the Committee: It has been determined that, in the case of the majority of these combined courses, there has been front loading of the correspondence portion of the course in that the majority of the cost for the overall combined course is charged for the cor- respondence segment of the course. A relatively brief period of residence training is generally required following the taking of the correspondence lessons. It has been found that in many of these combined courses the co~rrespondence portion of the program, for which the bulk of the charge is made, is of questionable value. Such practices are contrary to the basic intent of the law regarding payment for training under the GI bill. Abuse can also exist with re- spect to a course of training pursued exclusively by correspondence. An example of such abuse occurs when what is really being sold to the veteran and paid for with Federal funds is expensive equipment rather than training for a vocational objective. 12j PAGENO="0732" 3352 Thus to help prevent and reduce abuse in these sit,uations, section 1780(5) provides that th.e VA payment will not he made either for the pursuit of a program of education exclusively by correspondence ~s authorized under section 1786 or for the pursuit of a correspondence portion of a combination correspondence-residence course leading to a vocatjonal obiective. when. the normal period, of time required. to com- plete such correspondence course or portion is less than 6 months Cer- tification.. as to the normal period of time required to complete the course must he made to the Administrator by the educational institu- tion. The Committee recognizes that although the normal completion. time must be 6 months or more that there will be some gifted students, generally not exceeding 20 percent of the total, who may, because of skill and diligence, complete the course in somewhat less than the re- quired 6 months period. In adopting this provi.sion~ the Committee observes that it is con- sistent with the provisions of the VA education loan program which requires, as a condition of eligibility under section 1798(c) (1), that vocational objective courses must be of 6 months duration or longer. The 6 month reciuirement is also consistent with longstanding require- ments for participation in the guaranteed student loan program as managed by the Office of Education. OE's regulations which were revised in 1975, provides as a condition of eligiblity, that: In the case of a program offered by correspondence requires not less than an average of 12 hours of preparation per week over any 12-week period in completion and not less than 6 months * * * The Veterans' Administration favors this proposal, stating that it will "be of assistance to us in curtailing the abuses which have oc- curred in this program". Although they believe cost savings will result from enactment of this provision, they are without sufficient data upon which to base a cost estimate. Section 506 This section amends section 1780 (a) to liberalize provisions goverm ing the period for which payment may be made to an eligible veteran or person. Section 1780 (a) normally provides that payment of educa- tional assistance allowances may not be made for any period during which a veteran or eligible person is not enrolled in and pursuing a course in accordance with the regularly established policies and regula- tions of the educational institution. The amendment made by this sec- tion adds three exceptions to the general rule. The first exception simply restates existing law permitting continued VA payments when schools are temporarily closed, based upon an Executive order of the President or an emergency situation. This provision was added by Public Law 93-208 in December 1973 during the energy crisis. The second exception would permit payment of educational benefits for a period between successive terms (not to exceed 30 days) when a veteran or other eligible person transfers to another institution. Fre- quently, veterans enrolled for two successive terms at a particular school transfer to a second school for a second term. Usually, they pursue the same or similar program but are denied payment for the break at the end of enrollment at the first school and the beginning of the next term at the second school, because technically they are not ~ PAGENO="0733" * 3353 enrolled at either school during the break period. By contrast, a student who is enrolled at the same school for both semesters is paid for the break period (except for any calendar months in which no training is scheduled) Because the student who is transferring oetwee~i semesters is not out of training for any longer period of time than the student continuing in the same school, the Committee believes that sucn veteran or eligible person is unfairly discriminated against when no subsistence allowance for that interval is permitted. The Committee thus regards this as an equitable amendment which treats similarly situated students alike. At the same time, the Committee is aware that this provision might possibly be subject to abuse and directs the Veterans' Administration to examine carefully any case which reveals multiple successive trans- fers. In reporting favorably on this proposal, the Veterans' Adminis- tration noted that: since trans1~ers to the new schools are not usually made known to the Veterans' Administration promptly, overpayments have been created which result in nonpayment periods for the veteran or dependent in the new term when the overpayment is collected. The veteran usually has already spent the money and has no current funds for his training. The proposal would end the need for creating an over- payment against the veteran or dependent for this interim period of time, would elimmate the imposing of hardship on such an individual by requiring the collection of the ovefpay~ merit during a period of time the individual needs funds for education or subsistence, and would eliminate the paperwork required for creating and collecting the resulting over- payment. The third exception concerns those situations where educational institutions do not certify the students~ enrollment for the full school year, but, instead, certify only on a one. term, quarter, or semester basis. Because section 1780(a) (1) currently provides that educational assistance allowances may not be paid for any period during which a veteran or eligible person is not enrolled or pursuing a course in the accordance to regularly established policies and regulations of the ed- ucational institutions, payments are not authorized during intervals between terms for those students attending schools which do not certify for the full school year. The exception permitted under this section would allow the payment of benefits to continue during these intervals if they do not exceed one full calendar month. In the case of courses not leading to a standard college degree, however, such absences shall he counted for the purpose of computing the annual 30-day absence limit. Payments authorized under this section are to be made for such intervals upon receipt of the schools certification revealing enrollment of the student in the term following the interval between terms. This would allow the student to continue to receive his alk~wance in the same manner as those students who are certified for the whole school year. The Veterans' Administration also favors this provision stating that it would "eliminate a situation which amounts to dis- crimination against a small number of veterans and dependents who are penalized where the school certifles on this limited basis." Al- PAGENO="0734" 3354 though lacking precise data upon which to base a cost estimate, the Veterans' Administration believes that the cost would "not be significant". Section 507 This section amends section 1784(a) to clarify and codify ~cvhen an interruption or termination of a course of education by a veteran or eligible person occurs. Section 1784(a) requires that educational in- stitutions report to the Veterans' Administration without delay any interruption or termination of a veteran or any other eligible person enrolled therein. This amendment codifies long-standing policy now expressed in regulations which is that the date of interruption or ter- mination for institutional training is the last day of pursuit by the student. The Committee notes that the lack of prompt reporting on the part of schools, coupled perhaps by ignorance of or confusion about the meaning of 1784 (a), has contributed, in significant part, to the overpayment problem currently being experienced under the GI bill. The General Accounting Office report on overpayments (MWD-76-109) noted that 41 percent of overpayments were caused either by the failure of either the institution or the veteran to notify promptly the Veterans' Administration. The Committee is cognizant of the difficulties sometimes encountered by large institutions in ascertaining the last date of a veterans pursuit of education particularly when little, if any, emphasis is placed upon class attendance. Although the Committee does not expect extra- ordinary measures to insure compliance with section 1784 (a) (such as, regular taking of attendance by instructors or individual monthly certification by veterans) it does expect reasonable diligence by institu- tions and their employees to ascertain and report terminations or inter- ruptions promptly. The failure of students to submit required papers or reports or to appear for examinations may be appropriate bench- marks in making such determinations. Generally, report of such ter- minations or interruptions should be submitted by the institution no later than 30 days after the event occurs. Notwithstanding the fore- going the Committee intends that the Veterans' Administration recog- nize that special circumstances may require some flexibility in the inter- pretation of this rule. In some instances, even the best school reporting system may not be capable of detecting an enrollment change as it occurs. When this is the case, the 30-day period may be counted from the earliest point (rather than the actual day of occurrence), that the school could pos- sibly have learned of the enrollment change or termination. The pro- vision is favored by the Veterans' Administration. Section 508 This section amends section 1784 (b'~ to increase by at least 50 per- cent the reportin~ fee paid to institutions for certitic~tions made to the Veterans' i\ dministration. When the current GI bill was enacted into law in 1966, no provision was made for payment of any fee to institutions for certifvin~ veterans who were enrnllin° in their institu- tions. Subsequentlv~ however. Public Law 90-77 authorized the pay- ment of a reporting fee which is computed by multiplvin~ $3 by the number of eligible veterans or persons enrolled in the institution. This reporting fee was later amended by section 315 of Public Law PAGENO="0735" 3355 92-540 to provide an additional dollar in each case where an advance payment check is directed in care of the institution for temporary custody and delivery as provided for in section 1780. In the current fiscal year, reporting and check handling fees paid to schools'nation- wide will total approximately $6.4 million. In recent months, a number of schools have contacted `the Committee urging that the reporting fee be increased. And, the General Account- ing Office, in a report concerning overpayments, noted that: In the 8 years that the $3 reporting fee has been in effect, it has not been reevaluated to determine its adequacy in light of rising school operating costs and as an incentive for timely reporting of training status changes. In view of the identified delays in school reporting and school officials' comments about the inadequacy of the current $3 reporting fee, we believe VA should reevaluate the fee and, if appropriate, submit amendatory legislation to the Congress. The Veterans' Administration, in its report to the Committee, also noted that: In recent months, the Veterans' Administration has re- ceived complaints from educational institutions throughout the country indicating that they were unable to maintain adequate administrative functions concerning veterans and dependents based upon the current payment from the Vet- erans' Administration. Schools have indicated that the infla- tionary pressures, additional burdens put upon them with advance payment, standards of progress requirements, and the 50 percent employment surveys where applicable, they `have had to increase their administrative staffs. We believe that an increase in the reporting fee at this time is warranted. The `Committee concurs and would increase the basic reporting fee from $3 to $5 in the case of most schools. The Committee would also increase the basic reporting fee from $4 to $6 in those instances where schools handle advance payment checks authorized to be paid under specified conditions. The Committee acknowledges that these fees, even as increased, may not cover all expenses incurred in complying with various reporting requirements. The Veterans Student Services pro- gram established under section 1685, however, makes available veteran work/study students who may be utilized in "the preparation of pro- cessing of necessary papers and other documents at educational insti- tutions . . ." In the current fiscal year, VA financial work/study students will devot~e over 5 million hours ($10.5 million) to the pro- cessing of such papers at educational institutions. Limitations on the maximum number of work/study students or hours which ca.n be used for this and other purposes were removed by Congress in Public Law 93-508. Section 1685 (c) now provides that the Administrator shall determine the number of veterans whose services can be effectively utilized. Accordingly, institutions who need addi- tional assistance in completing certifications and other requirements of the Veterans' Administration should make application for such assistance during the Administrator's annua.l survey as required by 125 PAGENO="0736" 3356 section 1685(e). The Committee intends to monitor closely the disposi- tion of these applications filed henceforth. The Veterans' Administration estimates that enactment of this pro- vision would result in the following additional administrative expenses as shown in the following table: TABLE 31. REPORTING FEE INCREASE Fiscal year and administrative cost: 1977 $3, 250, 000 1978 2, 880, 000 1979 2, 585, 000 i~so 2,235,000 1981 1, 890, 000 Total 12, 840,000 The Congressional Budget Office, however, estimates that the cost of this program will be $5.1 million in fiscal year 1977, declining to $3.8 million in fiscal year 1981. Section 509 Subsection (a) amends sections 1788 (a) (1) and (2) relating to the measurement of courses not leading to a standard college degree. The amendment would reduce the number of clock hours necessary to qualify as a full-time course. Currently, section 1788 (a) (1) provides that an institutional, trade., or technical course, not leading to a standard college degree (offered on a clock-hour basis), which involves shop practice as an integral part, thereof, must have a minimum requirement of 30 hours per week (of which 21/2 hours may be rest period) in order to qualify as a full- time course. Section 1788 (a) (2) provides that any institutional course, not leading to a standard college degree (offered on a clock-hour basis), in which theoretical or classroom instruction predominates, must have a minimum of 25 hours a week in order to qualify as a full-time course. The 30-hour clock-hour requirement was enacted 25 years ago when there were few, if any, vocational or technical education courses above the high school level. Today, prevailing educational practice (and State policies) for postsecondary institutional and trade or technical courses generally regard 20 to 27 hours per week for full time for non- veteran students. Similarly, the. 25-hour rule, which governs noncollege degree courses covered by section 1788 (a) (2), for the most part, exceeds that now required of nonveterans. In order to qualify for full-time veterans' benefits. Most institutions not leading to a standard college degree, add 5 or more hours a week of "supervised study". Supervised study is essentially a "study hall" in which students do assigned homework with an instructor available to answer questions. Nonveteran students complete their homework on their own in a nonsupervised situation. Available evidence suggests that there, is little, if any, variation in either school performance or in the attain- ment of vocational objectives between nonveterans who attend fewer clock-hours and veterans who must attend an additional 5 or more hours of supervised study each week. For example, a recent survey of data processing graduates, comparing day students who trained 5 hours a day (1 hour of which is supervised study), and night students who train 4 hours a day, revealed littie differences in jobs attained or i26~ PAGENO="0737" 3357 salaries achieved by the two groups of graduates. Both day and evening students are provided with 120 class sessions, both students receive the same basic and ~eneral theory, and both have the same programing production requirements. The only difference is that the day students perform their homework in class (supervised study) and the evening students perform their homework outside of class. The Committee also notes the increasing tendency of many degree granting institutions to convert vocational objective courses, previ- ously measured under section 1780(a) (1) or (2), to degree grant- ing programs where courses approved for full-time benefits now often require as little as 12 hours per week. Whether it be an associate degree in automotive repair or a degree program in electronics or certain health care professions, the degree granting programs are distinguished more by what they have in common than by their dis- similarities with comparable courses offered on a clock-hour basis by nondegree granting schools. Indeed, representatives of the Amer- ican Association of Community and Junior Colleges, appearing before the Committee some time ago, criticized the current clock-hour re- quirements in sections 1780(a) (1) and (2) and stated: The veteran enrolled in courses of education measured on the 30-hour basis often feels: That he is being discriminated against because of his interest and is being penalized because his abilities are trade oriented as opposed to technical or col- lege parallel. He is often discouraged and may eventually drop the course prior to completion of course requirements, or he will request transfer to technical or transfer curriculum which will permit him to draw full-time benefits. The change usually results in a student veteran in a course which he is either not suited to his goal or his abilities. In end result is another dropout who is no better qualified to take a position in the world of business or industry than he was prior to enrollment. Further, the 1974 study of the Gil bill, mandated by Public Law 92-540 and conducted by the Educational Testing Service of Prince- ton, New Jersey, concluded that "differences in treatment of veterans pursuing college degrees and veterans pursuing nondegree post-sec- ondary educational programs may be inhibiting the use of benefits for below college level training." Given the foregoing, the Committee believes that a reduction in the minimum number of clock-hours is warranted and can be accomplished without a reduction in the quality of the course or lessened attainment of vocational objectives by its graduates. Consistent with the fore- going discussion, the Committee, in permitting a reduction in clock- hours, expressly excludes supervised study in computing the required number of hours. This new measure is limited to schools accredited by nationally recognized accrediting agencies and approved pursuant to section 1775. The Committee has been assured by representatives of applicable accrediting bodies that such clock-hour reduction will not result in the diminution of the quality of courses offered. Accordingly~ the Committee expressly intends that such accrediting bodies take ap- propriate measure so that this does not occur. Any evidence to the con- trary will result in prompt Committee reevaluation of the amendmentc~ made by this section. 78-226 0 - 77 - 47 (Pt. 4) 127 PAGENO="0738" 3358 * Sub8ectaon (b) amends section 1789 by adding a new subsection (c) limiting the current statutory exceptions to the "two year" rule con- tained in that section. Section 1789(a) provides that the Administrator shall not approve the enrollment of an eligible veteran in any course offered by an educational institution when such course has been in operation for, less than 2 years. Legislation requiring the expiration of a specified period of time before courses offered by an institution could be approved for the enrollment of veterans with available Federal funds originated in the closing years of the World War II GI bill. Experience with the World War II GI bill disclosed the development of schools and courses which were almost exclusively aimed at veterans eligible for GI bill payments. The abuse posed by such operations finally became all too evident and Congress responded by enacting Public Law 81-266 which con- tained provisions prohibiting GI bill payments to veterans training in institutions which `had been in operation less than 1 year. The amend- than in collecting sizable Federal payments. As with the limitations subsequently enacted on the number of federally assisted students who could be enrolled in any course, this provision was a device intended by Congress to allow the free market mechanism to operate and weed out those institutions who could survive only by the heavy influx of Federal payments. As implemented by regulation, the Veterans' Ad- ministration treated as a new school any new branch campus other than one established in close proximity to the original school that was "nec- essary to handle the overflow of students in the parent institution." Subsequently, legislation was enacted as part of Public Law 81-610 `which specifically exempted from the 1 year requirement any public or other tax supported school. Although the legislative history concerning this exemption is minimal, the exception, no doubt, reflected an assess- ment that the majority of problems which first occasioned the rule orig- inated with proprietary-for-profit schools. It should be noted, however, that the Veterans' Administration expressed reservations at the time about such an exception to the 2-year rule noting that: The very purpose of the general requirement that a school must have been in operation for at least 1 year is to insure that it shall `have proven its worth for a reasonable period of time so that the interest of the veteran will be protected and Federal funds will not be expended wastefully. If the purpose is to be carried out effectively, the requirement must be `as nearly uniform as possible. The Korean conflict GI bill (~ 2~?T, Public Law 82-550) provided that a course must have been in operation for at least 2 years before veteran enrollment could be approved. The House Veterans' Affairs Committee report, accompanying that legislation (H.R. Rept. 82- 1943), termed this provision "a real safeguard to assure sound training for veterans at reasonable cost by seasoned institutions." They further noted that had such a requirement been in effect for most of the life of the World War II GI bill that there was "little doubt that consider- able savings would have resulted and much better training would have resulted in many areas." The Korean conflict GI bill also provided exceptions which were expanded somewhat without discussion with the enactment of the 128 PAGENO="0739" 3359 current GI bill program (Public Law 89-358). A minor exception, with respect to certain institutions offering courses under subchapter V or VI of chapter 34, was adopted in 1972 (Public Law 9Z-540). The basic rationale of the current exceptions to the 2-year rule has come under serious question in recent years. Certain institutions, both public and proprietary, have suddenly developed many branch cam- puses throughout the United States. For the most part, these schools also have entered into extensive recruiting contracts directed almost exclusively at veterans. TheVeterans' Administration, in a favorable report to the amendments proposed by this section, stated that: In recent months, a number of instances have been brought to our attention which represent abuse of our educational programs. Some of these cases involved contracting between nonprofit schools and profit schools or organizations where~by courses designed by the latter are offered by the non-profit, * accredited school on a semester- or quarter-hour basis. In others, there are arrangements between nonprofit, accredited schools and outside profit firms whereby the latter, for a percentage of the tuition payment, perform recruiting serv- ices primarily for the establishing of these branch locations for the school. These recruiting efforts are aimed almost exclusively at veterans. The increase in veteran enrollments in schools establishing multi- branch campuses has often been spectacular. In one instance, a small institution of higher learning (accredited by a regional accrediting institution), which had only a handful of veterans enrolled at its single. campus, in less than a year developed branch campuses (which often were rented rooms in local motels) in over 40 States and increased their veteran student population to over 13,000. In testimony before Congress this year, the Veterans' Adminis- tration testified that there has been a- dramatic rise in the number of recruiting, consulting, and other specific service-type contracts that schools are entering into with profitmaking organizations. The most common type of contract involved recruiting services offered to degree granting schools, particularly business colleges, by profit- making, noneducational organizations. The nonprofit educational institutions which are entering into these recruiting contracts are generally colleges accred- ited to offer standard college degrees. Thus, they are not subject to the 2-year rule, the 85 to 15 percent ratio require- ment, or the 50 percent employment requirement. The prolif- eration of business colleges, as well as other colleges, enter- ing into recruiting contracts which capitalize on these special exemptions raises serious questions concerning the validity of the legislative pren-tise which gives special exemptio~-s to degree granting institutions. [Emphasis added.] The services offered. by these nonacademic organizations include bookkeeping, computerizing school records, recruit- ing students, training the school's recruiters, supplying in- structors, supplying course outlines, material, and textbooks, and helping the colleges set up additional classrooms off the college's traditional main campus. 129. PAGENO="0740" 3360 Some contracts cover only one of these services, some sev- eral, and some all of them. In return for these services the outside organization receives a portion of the tuition charged by the schools. Where the outside organization was itself a school it ap- pears as though the contract was a method of avoiding the 2-year operation requirement, the 85 to 15 percent veteran- nonveteran ratio requirement and other sections of the law specifically forbidding approval for certain types of voca- tional courses. In some cases the colleges offering the courses were giving up control over the courses. We have found that the recruiting organizations are pri- marily recruiting veterans. Although the contracts cite the need to "recruit students" who would otherwise be denied educational opportunities, we have found that, in reality, the only people being recruited are veterans and the strongest and most successful recruiting tactic is the monetary incen- tive to be gained from the receipt of VA benefits. As we review these contracts, it appears that the schools and the nonacademic organizations are entering into profit- making, joint venture or partnership undertakings which are directed solely at the benefits being paid to veterans and other eligible persons. While the Committee does not undertake to assess either the quality of the instruction offered at all of these branch campuses or the motives of all those who promote such arrangements, the situation does present great potential for abuse and in several instances that potential appears to have been realized. At a minimum, the Committee concurs with the Veterans' Admin- istration's testimony that the current situation "raises serious ques- tions concerning the validity of the legislative premise which gives special exceptions to degree granting institutions." Accordingly, this section adds a new subsection (c) which pro- vides that, notwithstanding the exceptions contained in subsection (b), the 2~year rule applies first, to branches or extensions of public or other tax supported schools when such branches or extensions are located outside the taxing jurisdiction of the public or other tax supported school; and second~ to branch or extensions of proprie- tary-for-profit or not-for-profit institutions when such branches or extensions are located beyond the normal commuting distance of the main campus. The Committee intends that current regulations and practice found in Program Guide 21-1, chapter 196, section M-26 be applied with respect to the definition of "normal commuting distance." The Veterans' Administration~ which supports these amendments~ reported that enactment would "aid in curtailing the abuses which have turned up . . .". Although they believe cost savings will result from enactment of such legislation, they were without sufficient data to estimate it. Section 510 This section amends section 1792 establishing an Administrator's advisory committee on title 38 educational assistance prorrams by requiring that advisory committee to meet and consult with the Ad- 130 PAGENO="0741" 3361 ministrator on a regular basis. The amendment provides that, at a minimum, the advisory committee will meet twice a year. The advisory committee, established by section 1792, is required by statute to be com- posed of persons eminent in their respective fields of education, labor and management, together with representatives of various types ,of institutions and establishments furnishing education to veterans train- ing under chapters 31, 34 and 35. The advisory committee's member- ship must include vete.rans of World War II, the Korean conflict, the post-Korean conflict and the Vietnam era. The Commissioner of Education, the Administrator and the Assist- ant Secretary for Employment and Training Standards of the Depart- ment of Labor are all e.x-officio members of the advisory committee. The Committee on Veterans' Affairs believes that such an advisory committee can serve as an important link and conduit between the Vet- erans' Administration and those affected by its programs. TJnfortu- nately, the advisory committee has met sporadically and little em- phasis has been placed by the Veterans' Administration upon the role the committee could play in the exchange of information and ideas. It is noted that the advisory committee has not met since Oc- tober 17, 1~75. A review of the history. of the advisory committee meetings since 1966 reveals that it met onôe in 1966, once in 1967, twice in 1968, once in 1969, twice in 1970, once in 1971, and not at all in 1972. It met seven times in 1973, generally as a result of require- ments of an education study directed by Congress in Public Law 92- 540. The advisory committee did not meet in 1974 and it met twice in 1975. It has not met this year. Amendments made by this section would require them to meet at least twice a year. The Committee believes that even more frequent meetings of the advisory committee are probably warranted and would be beneficial. The Committee also notes that section 1792 has long contained pro- visions that the advisory committee may make such reports and rec- ommendations as it deems desirahie to the Administrator and Con- gress. Apart from action taken with respect to Congressionally man- dated studies, however, no reports or recommendations have been made to the Congress in the last 10 years. The Veterans' Administration has "no objection to these changes." Section 511 This section amends section 1790(c) to clarify and strengthen those provisions relating to examination of records and accounts of educa- tional institutions. Currently, section 1790(c) provides that the records and accounts of educational institutions, pertaining to eligible veterans and persons who received educational assistance under title 38, are to be available for examination by duly authorized representatives of the Government. The meaning and effect of this section, which had always been well understood, was called into question by the adoption of provisions in Public Law 93-380, known as the Buckley Amendment, relating to protection of the rights of privacy of parents of students. The Buckley Amendment contained in section 438 of the General Education Provisions Act as added by section 513 of Public Law 93-380 and amended by Public Law 93-568, requires that in- stitutions receiving funds from those programs for which the United 1311 PAGENO="0742" 3362 States Commissioner of Education has administrative responsibility~ must obtain consent before releasing education records of students (or personally identifiable information contained therein~ except to speci- fied parties or in certain specified situations. That section in pertinent part is as follows: (b) (1) No funds shall be made available under any appli- cable program to any educational agency or institution which has a policy or practice of permitting the release of educa- tion records (or personally identifiable information contained therein other than directory information, as defined in para- graph (5) of subsection (a)) of students without the written consent of their parents to a.ny individual, agency, or orga- nization, other than to the following * * * Section 438(e) of the Act provides that the consent must be ob- tained from the student in lieu of the parent when the student "has attained 18 years of age, or is attending an institution of post- secondary education,". The only Federal officials specifically exempted from the consent requirement are authorized representatives of the Comptroller Gen- eral, the Secretary of Health, Education, and Welfare and administra- tive heads of education agencies in HEW (section 438(b) (1) (c)). The adoption of the Buckley kmendment, thus, raised questions as to whether the Administrator had legal access to student records. If it were held that he did not, additional questions were raised as to whether he could continue to comply with many provisions of title 38 such as those which direct the Administrator to discontinue payments in the case of unsatisfactory progress (section 1674) and those which provide that he may determine enrollment in, pursuit\of and attendance at, various educational institutions. Closer examination of the Buckley Amendment disclosed, however, that it is not necessary for an institu- tion to obtain consent before releasing information when the informa- tion is sought in connection with the provision of financial assistance. Section 438(b) (1) (D) excepts parties seeking information "in con- nection with a student's application for, or receipt of, financial aid." Because there is no legislative history indicating that "financial aid" was limited to any particular type of assistance, the General Counsel of the Department of Health, Education, and Welfare issued an opin- ion that veterans' benefits would constitute financial aid within the meaning of section 438 (b) (1) (D). This determination meant that educational institutions could properly disclose personally identifiable information from students' education records which are relevant to veterans' benefits to representatives of the Veterans' Administration without contravening section 438 (b). The Assistant Attorney General for the Civil Division of the Department of Justice concurred in this interpreta~ in a letter dated May 9, 1975, to the Veterans' Adminis- tration in which he said that there was "no provision in either Public Law 93-380 or Public Law 93-568 which repeals or appears intended to repeal the more specific and, therefore, controlling provisions of 38 U.S.C. ~ 1790(c)." Despite this concurrence of opinion by both the Department of Justice and the Department of Health, Education, and Welfare, ques- tions challenging the authority of the Veterans' Administration to ~32~ PAGENO="0743" 3363 examine pertinent student records have been and continue to be raised by certain institutions. To clarify this situation, this amedment is in- tended to make explicit the understanding by both the Co'~rmittee and the Administration that the provisions of section 1790 (c) were not nullified by the adoption of the Buckley Amendment. Section 1790(c) has also been amended to make explicit that such records of nonveteran students, as the Administrator determines nec- essary to ascertain institutional compliance with the requirements of title 38, will also be available for examination by duly or authorized representatives of the Government. These nonveteran records are required for a variety of reasons including ascertaining compliance with first, the 85-15 percent ratio rule (~ 1673(d)) ; second, the 50 per- cent placement requirement (~ 1673 (a) (1)); and third, the require- ment that eligible veterans or persons not be charged tuition or fees in excess of those charged similarly circumstanced nonveterans (~ 1790(a)). Records, which may be examined, include financial records (includ- ing accounts receivable ledgers), the school's basic records (not~ just consolidated office records or file copies), classroom roll books, finan- cial aid records, progress records, enrollment agreements/applications and employment placement records. Section 512 This section repeals both section 1793 relating to institutions listed by the Attorney General and section 1795 concerning limitations on period of assistance under two or more programs. A new section con- cerning compliance surveys is added. Clav,ee 1 first amends subchapter TI of chapter 36 by repealing sec- tion 1793 which currently provides that the Administrator shall not ap- prove, for the purposes of payment of educational assistance allowance, enrollment of eligible veterans in any institution listed by the Attor- ney General under section 12 of Executive Order 10450. This provision was added by the Korean conflict GI bill (Public Law 82-550) in 1952. An examination of the legislative history of this provision discloses neither comment by any Federal agency nor any discussion in either the Senate or House report or on the floor of either chamber. The requirement for an Attorney General's list was abolished by Executive Order 11785 issued June 4, 1974. Accordingly, whatever need there may have been for this provision has been vitiated, render- ing the section obsolete. Section 512 also adds a new section 1793, which directs the Admin- istrator to conduct annual compliance surveys of institutions enrolling eligible veterans. This provision requires that the Veterans' Admin- istration conduct an annual survey of each institution offering courses which do not lead to a standard college degree. Annual compliance surveys are also required of those institutions offering a course or courses leading to a standard college degree where at least 300 veterans or persons enrolled in the school are in receipt of VA educational as- sistance payments. The Committee cannot stress enough that the most comprehensive or detailed laws and regulations are of little conse- quence without active and effective enforcement. A number of the abuses uncovered in recent years (discussed elsewhere in this report), have flourished principally because of insufficient personnel and inadequate compliance surveys. 133 PAGENO="0744" 3364 These abuses which have been uncovered have generally been as a result of an increased number of compliance surveys conducted by a VA staff which has been stretched thin in recent years. To assure that the surveys required by this section will be conducted in a com- prehensive and effective manner, the section directs the Administra- tor to assign at least 1 education compliance specialist to work on com- pliance surveys for each 40 compliance surveys required to be made under this section in any year. The Committee understands, given cur- rent and anticipated workloads, that enactment of section 1793 will require the hiring of an additional 200 educational compliance special- ists in fiscal year 1977. In adopting this section the Committee expects that the compliance survey program will meet 5 basië objectives. First, such program and survey should verify and assure the pro- priety of payments of VA educational benefits to eligible individuals. Seáond, such program should provide a reasonable basis for cooperat- ing with State Approving Agencies. Third, the compliance survey pro- gram should be directed toward assisting schools, training officials, and eligible individuals in better understanding their responsibilties in regard to the procedures and requirements of the Veterans' Admin- istration. Fourth, the compliance survey should determine, on the basis of facts disclosed from personal visits to schools and establishments, whether there are deviations by eligible individuals, schools or estab- lishments from the requirements of the law. Fifth, the compliance survey program should assure that proper actions for the correction Or elimination of existing discrepancies, or the discontinuation of benefits to eligible individuals in the event correction is not accom- plished are taken through appropriate channels. The Committee wishes to emphasize that the compliance survey program offers an opportunity by officials of the Veterans' Administra- tion to explain in detail the provisions and requirements of the law to school or training officials in order to prevent deficiencies or violations which could develop because of misunderstandings or misinterpreta- tions of the law. The Committee believes that fewer problems would have developed in the past few years had there been better explana- tions of the various requirements to appropriate~ individuals and schools. The Committee wishes to emphasize, however, that when dis- crepancies in the operation of institutions are found, prompt and prop- er action should be taken. The Committee intends that the compliance survey specialists mandated by this section will fully understand their respective responsibilities and will insure that in each case that the survey is conducted in accordance with prescribed policies and pro- cedures. The Veterans' Administration estimates that the first year addi- tional cost, occasioned by enactment of this section, would be $3.4 million. The Congressional Budget Office in their estimate said that this figure only took into account salary and travel dollars and failed to include additional moneys for operating expenses. Accordingly, the Congressional Budget Office estimates that fiscal year 1977 year cost would be $4.3 million, increasing slightly to $5.6 million at the end of the fifth year. The Committee notes that the additional sums man- dated by this provision represent only .008 percent of the ~5.7 billion spent in VA educational benefits in the past fiscal year. This minor expenditure which will aid in assuring that VA benefits are expended 134 PAGENO="0745" 3365 in accordance with the law is, the Committee believes, both a wise and necessary investment. Claw~e 2 repeals section 1795 which currently limits an individual entitled to VA educational assistance under more than one Veterans' Administration program to a combined total of 48 months assistance. By repealing this section, dependents eligible for educational assist- ance under chapter 35, the Survivors and Dependents Educational Assistance chapter (as redesignated by section 309 of this Act) who subsequently served honorably in the uniformed services would `be en- titled to full educational benefits under chapter 34 (or chapter 32 where applicable) by virtue of that service. Public Law 90-631 ap- proved on October 22, 1968, modified an original 36-month restriction by providing that the combined assistance provided under chapters 35 and 34 may not exceed 48 months. The Committee believes that any veteran entitled to training under chapter 35, because of the service-connected death of a parent, should not be discriminated against by a provision nullifying full entitle- ment for benefits under chapter 34 of the GI bill earned by honorable service in the Armed Forces. The law is clear that a survivor is entitled to certain assistance when the parent died of a service-connected cause. The law is equally explicit that a veteran who served in the Armed Forces during a qualifying period is entitled to training as- sistance under the QI[ bill. The exercise of one of these entitlements should not serve to abrogate or reduce the other. Entitlement to bene- fits under each program is predicated upon entirely different factors and circumstances and are not interdependent. Accordingly, the Committee concurs with the earlier position of the Veterans' Administration in its 1968 report to 11.11. 16025 which, as enacted into law extended benefits to the current 48-month level. At that time, the VA reported that "it would be more advantageous and practical not to limit the veteran to a total of 48 months, but to permit him to use the entire current earned educational entitlement." The VA further testified: The numbers who would take advantage of this change in the law would be small and the additional cost would not be susceptible to measurement but for those needing addi- tional training and privileges of pursuing the program of education would be most worthwhile. A similar measure was unanimously approved by the Senate in 1974, but not accepted by the House. The VA states that it has no data available on which to base `a cost estimate on this section of the measure. Clause 3 amends the table of sections at the beginning of chapter 36 to reflect the repeal of current section 1793 and the addition of the new compliance survey provisions. Clause 4 further amends that table of sections at the beginning of chapter 36 to reflect the repeal of section 1796. Section 513 This section amends section 1796, of title 38, United States Code, relating to limitations on certain advertising sales enrollment practices of institutions enrolling veterans by adding a new subsection requiring such institutions to maintain a complete record of all advertising 135 PAGENO="0746" 3366 sales enrollment material utilized during the preceding 12 month period. Such materials would be required to be made available for inspection by the State approving agencies or the Veterans' Administration. Section 1796 was added by section 212 of Public Law 93-508. The Committee report to S. 2784 (S. Rept. 93-907) where this provision originated, noted the Committee's growing concern over certain ad- vertising sales and enrollment practices of various institutions, where courses are approved for the enrollment of veterans and other eligible persons. This concern prompted Congressional enactment of section 1796 which directs the Administrator not to approve the enrollment of an eligible veteran or eligible person in a course offered by any institu- tion which utilizes advertising sales or enrollment practices of any type which are erroneous, deceptive or misleading either by actual statement, omission or intimation. Despite the clear and unmistaken statutory mandate, little has been done by the Veterans' Administration to effectuate the Congres- sional intent expressed in considerable detail on pages 84 to 90 of Senate Report 93-907. The agreement which Congress directed the Administrator to enter into with the Federal Trade Commission (§ 1796(c) as redesignated by section 513(1) of this Act), to utilize the Commission's services and facilities and carrying out investiga- tions and making determinations under section 1796 was not even formalized until January 20, 1976, over a year after enactment of Public Law 93-508. Moreover, the General Accounting Office for the past year pursuant to the Committee's request has been reviewing the implementation of the Commission's services and facilities in carrying out investiga- selected provisions of Public Law 93-508 for the past year. The Com- mittee understands that GAO has found that neither the Veterans' Administration nor the State Approving Agencies have systematically reviewed any of the advertising sales or enrollment practices of schools enrolling veterans. Whatever review has occurred has only been in response to specific complaints, and, in those cases, the VA's investiga- tions have been tentative and cautious at best. The committee believes that active enforcement of the provisions of this section which will apply to all schools is particularly important now that many degree granting institutions have adopted aggresssive recruiting and advertising policies. As Eric Wentworth of the educa- tion news staff of the Washington Post noted in an editorial page article on April 3, 1975 entitled "Protecting the Consumer of Education": * * * many colleges-large as well as small, familiar as well as obscure-~have begun advertising for students in a manner which befits commercial establishments rather than academic institutions. The trend seems sure to intensify, and it calls for some clear, concise standards of marketplace behavior. * * * * * However alien to traditional academia, most of these mer- chandising techniques, are neither' illegal nor unethical in themselves. But the more widely they are used, the more op- l36~ PAGENO="0747" 3367 portunities and temptations there are for abuses. And whether abuses result from naivete or deliberate deceit, stu- dent consumers stand to be misled. * * * * * Whatever the underlying causes, however, the basic fact that colleges are using commercial methods to attract cus- tomers argues for making them publicly accountable in the same way that profit-making trade schools and other business enterprises using such methods are accountable. * * * * * Accordingly, the Committee intends that a comprehensive review of advertising ~ales and enrollment practices of all schools be insti- tuted by both the Veterans' Administration and the State approving agencies (SAA's) to assure that the provisions of section 1796 are enforced. The Committee also expects the VA-FTC agreement to be utilized in appropriate instances. The Committee understands that, to date, there has only been one tentative referral by the VA to the FTC. In all of the instances just mentioned, the Committee believes the amendment requiring retention of records and copies of materials utilized by schools will aid in reducing erroneous, deceptive or mis- leading sales and enrollment practices. First, ready access to the docu- ments by the VA, SAA's or the FTC pursuant to its agreement with the Veterans' Administration will facilitate determinations under see- tion 1796. Second, the recognition by all institutions that their sales and enrollment practices are subject to active review, presumably will result in greater self examination by them of their sales and enroll- ment practices. Finally, the Committee wishes to reemphasize its strong conviction- first expressed in the Senate report accompanying the 1974 GI bill amendments-_that there be a more adequate. and informative reporting system to the VA Central Office. Such reporting to the VA Central Office will permit examination of such practices in an overall perspec- tive so that greater uniformity of interpretation and enforcement may be achieved. As the 1974 Committee report noted: Many institutions where courses are approved for pay- ment of VA benefits do business in several States throughout the country. As a consequence~ regional office directors in one State, faced with certain questionable practices are often un- aware of similar problems in other States either by the same or different institutions. Accurate and detailed reporting to the Central Office and dissemination of anpropriate in- formation by the Central Office to regional offices should en- able these trends and problems to be spotted more readily and dealt with in an evenhanded fashion nationally. Clause 1 redesignates section 1796 (b) and (c) as 1796 (c) and (d), respectively. Clause 2 creates a new subsection (b) requiring that any institution~ offering courses approved for the enrollment of eligible persons or veterans to maintain a complete record of all advertising sales or enrollment materials (and copies thereof) utilized by or on its behalf during a preceding 12-month period. In this connection, the Committee 137 PAGENO="0748" 3368 expressly intends this provision to cover those situations where schools contract with individuals or organizations who undertake to advertise or recruit students for the institution. The materials required to be re- tained include, but are not limited to, any direct mail pieces, brochures, printed literature used by sales persons or recruiters, films, video tapes and audio tapes disseminated through broadcast media and material disseminated through print media, tear sheets, leaflets, handbills, flyers, together with any sales or recruitment manuals for instruction to sales- men, agents, or representatives of such institutions. The Veterans' Administration, in its written report to section 513, states that it believes "it would have a salutary effect of having such material available for inspection review". Section 514 This section makes a number of technical amendments to chapter 36, including providing for the continuation of VA advance and pre- payment of educational assistance allowances as required by section 1780 in title 38. The amendment adopted in this section will have the affect of nullifying action taken by the Appropriation Committees earlier this year in H.R. 10612 (without formal consultation with the authorizing committees) and subsequently enacted as Public Law 93- 378. Provisions in that fiscal year 1977 HTJD, Independent Agencies appropriation measure purport to abrogate prepayment authority and advance payment authority, in part, for the last 4 months of fiscal year 1977. The Committee believes this unusual initiative by the Appropria- tions Committee was not only inappropriate, but ill-advised. A tem- porary 4-month suspension of the title 38 provisions requiring advance and prepay will produce administrative chaos within the Veterans' Administration. Moreover, it is a blunt device which does as much harm as good in its attempt to reduce improper payments. The Committee concurs with the Administrator of Veterans' Affairs who in testimony before the House Appropriations Committee earlier this year said "the good that accrues from advanced payment far out-reaches the bad". This testi- mony was reinforced by the testimony of the Chief Benefits Director who subsequently appeared before the House Committee on Veterans' Affairs to testify that "Advance pay and prepay have had a good effect on a vast number of students. They have been able. to go to school where perhaps they would not have been able to go." Rather than termina- tion of such authority he urged that various new regulations adopted by the Veterans' Administration should be allowed to take effect and have "time to work their will." The Committee believes the numerous amendments adopted in S. 969, as amended, are a more effective and logical way of dealing with the problems of improper payments than temporary abrogation of the payment authority contained in section 1780. Amendments in this section would also remove unwarranted or unnecessary gender references. The following sections are affected: 1771, 1775, 1777, 1779, 1780, 1781, 1783, 1784, 1786, 1790, 1791, 1794, 1796, and 1798. 138 PAGENO="0749" 3369 TITLE VI-VETERANS' EMPLOYMENT ASSISTANCE PROVISIONS Section 601 Section 601 amends title 38 to create a new section 2002A in chapter 41. This section would create within the Department of Labor a sepa- rate agency known as the Veterans' Employment Service (VES) headed by an Assistant Secretary of Labor for Veterans' Employment. The Assistant Secretary would be responsible, subject to the super- vision and control of the Secretary, for carrying out the policies and purposes of chapters 41, 42, and 43 and for policy formulation and administrative implementation for all Department of Labor employ- ment, unemployment and manpower programs to the extent they affect veterans. A Veterans Employment Service (VES) currently exists within the Department of Labor. Previous legislation directed that policies in regard to veteran employment be promulgated and administered by VES in accordance with the stated statutory mandate that eligible veterans receive maximum employment and training opportunities through existing programs, coordination and merger of programs, and implementation of new programs. The Vietnam Era Veterans' Readjustment Assistance Act of 1972 (Public Law 92-540) further clarified and made specific the congressional intent that veterans receive effective assistance from the United States Employment Serv- ice (USES). The Committee report accompanying the 1972 GI bill in regard to veterans unemployment and the efforts of the Department of Labor stated that "far more needs to be done." As intolerably high rates of veteran unemployment continued in 1974 and services to unemployed veterans revealed little improvement, the Congress once again enacted legislation aimed at improving the situation. Public Law 93-508, the Vietnam Era Veterans'* Readjust- ment Assistance Act of 1974, further delineated and extended the responsibilities of VES. Currently, the VES is primarily responsible for implementation of the provisions of chapters 41 and 42 of title 38. In addition, VES is required to coordinate within the Comprehensive Employment and Training Act (CETA) framework, public informa- tion pertaining to veterans programs. In view of the importance of the responsibilities of the Director of the VES and in light of the continuing high rates of veteran unem- ployment, the Committee has concluded that, once again, "more needs to be done." The Committee believes that the Director of the VES is located at too low a level within the Department of Labor to carry out the congressional mandates in an effective and expeditious fashion. Statutory mandates have been ignored, gone unheeded, or have been implemented in a tardy and half-hearted manner by the Department of Labor. The State Employment Service agencies throughout the country have too often responded sluggishly and ineptly to the task of serving unemployed veterans. The Committee believes that all of these problems were exacerbated, if not caused, by the low priority assigned to veterans as evidenced by the relatively insignificant status accorded to the official responsible for directing the operation of the Veterans' Employment Service. And, the "proof of the pudding," can be found in the continued problems faced by veterans. 139 PAGENO="0750" 3370 In 1972, this Committee, in its report to legislation subsequently en- acted as Public Law 92-540, recognized that a "significant factor in the readjustment problem faced by the returning veteran is the continuing high unemployment rate * * * statistics for the second quarter of 1972 for veterans age 20-24 indicate an unemployment rate of 10.9 percent or over 11 percent higher than the nonveteran rate of 9.5 per- cent * * ~" In 1974, in the Senate report accompanying the 1974 Special Em- ployment Assistance Act of 1974, the Labor and Public Welfare Com- mittee expressed grave concern with the employment rates for veter- ans. That Committee predicted that "the burden of continued increases in unemployment will fall heavily on three groups of veterans who already have high unemployment rates: Young veterans in the 20-24 age bracket; minority group veterans; and disabled veterans * * * these three groups * * * are very likely going to face even more severe unemployment in the months ahead." Indeed, as predicted, the bleak unemployment picture has continued. At the end of June, younger Vietnam era veterans aged 20-24 had an unemployment rate of almost 20 percent, approximately twice as high as similarly aged non-veterans. Unemployment amongst all Vietnam era veterans was 13 percent higher than for similarly aged nonveterans. At the end of the tst quarter of 1976, younger minority vets had an unemployment rate of over 30 percent and estimates of unemployment among disabled veterans exceed 50 percent. During the past 2 years, veteran unemployment, particularly among younger, minority, and disabled veterans, has continued to rise. Un- fortunately, efforts by State Employment Services on behalf of vet- erans-efforts which are supposed to be monitored and guided by the VES-has not been been sufficient to offset increasing unemployment. For example, during the first 9 months of fiscal year 1976, close to one- third of all Vietnam vets who applied for assistance at the federally funded State employment offices had their files inactivated with no reportable service at all. In the first 9 months of fiscal year 1976, only 5.4 percent of the 1,846,171 Vietnam era veterans who applied to the employment service were counseled. This low rate is particularly tragic because a Vietnam era veteran who has received counseling has close to twice the chance of being niaced in a job than a non-counseled veteran. Further, the percentage of Vietnam era veterans counseled in the first 9 months of fiscal year 1976 was 15 percent fewer than the per- centage of Vietnam era veterans counseled at the end of the first 9 months in fiscal year 1975. Almost 171.000 disabled veterans applied to the Public Employ- ment Service for as& stance in the first 9 months of fiscal year 1976. Only 14.7 percent of these disabled veterans were counseled. The placement rate for those disabled veterans who were fortunate enough to receive employment counseling was 150 percent greater than the placement rate for those dis~ihled veterans who received no employ- ment counseling whatsoever. The tragedy of large numbers of dise.bled and Vietnam era veterans failing to receive counseling is underscored by the initial draft of the Department of Labor's study on the Vet- eran's Employment Service (known as the T(ruptzin study) wherein it is revealed that "almost 90 percent of LVERs (Local Veterans' Em- plovment Representatives') felt employment counseling helped in providing priority services to veterans * * 140 PAGENO="0751" 3371 In 1974, the Committee observed that "~ * * only 16 percent of the available Vietnam era veteran applicants were placed in a job in excess of 3 days and less than 2 percent was enrolled in Federal training programs. Services to veterans in State Public Employment Offices have not improved since 1974. Employment Security Automated Reporting System (ESARS) data for the first 9 months of fiscal year 1976 reveals that only 12.7 percent of the Vietnam era veterans who applied to the Employment Service were placed in a nonagricultural job of more than 3 days duration, and only 0.6 percent were enrolled in training. As is readily observable, these totals are even below the levels reported in the 1974 report. Despite concern and legislation by Congress, services to veterans have often deteriorated rather than improved. Continuing oversight by the Conimittee of the problems of veteran unemployment and of the programs designed to facilitate resolution of such problems has not been accorded the degree of responsiveness by the Department of Labor that the Committee believes is warranted Committee oversightS letters sent in the past year frequently have gone unanswered for up to 31/2 months as they were bounced around from one official to the next. Thus, centralization of the responsibilities mandated under title 38 within the office of Assistant Secretary should both enhance accountability for veterans programs and assure more responsive implementation of chapters 41, 42, and 43. An Assistant Secretary would also be in position to ~ssure policy formulation and administrative implementation of all Department of Labor employ- ment, unemploymei~t and manpower programs to the extent veterans are affected. The Committee acknowledges that within the Department of Labor confusion apparently exists as to the goals of the Employment Service concerning service to veterans. For example, a recent Wall Street Journal article in regard to the Employment Service quotes a "disgruntled" Florida State Public Employment Service Agency official as stating, "I'm supposed to give preference to everyone except the young, white male-unless he hanpens to be a migrant worker". The Assistant Secretary of Labor for Employment and Training Administration is quoted in the same article as noting that the USES operates "not only under the authorizing Wagner-Peyser Act of 1933, but also under mandates stemming from 21 other pieces of Federal legislation and executive orders, 19 arrangements with other Fed- eral and State agencies and two court orders." The Committee notes, however, that the Department of Labor recently prepared testimony providing background information on the Public Employ- ment Service in Preparation for oversight hearings. Therein, the Department of Labor stated: "* * * the only true priorities are bind- ing legal requirements: The law requires the ES to provide priority services to veterans, and a court order (NAACP vs. Rren'nitn, Civil Action No. 2010-72) rec~uires the ES to assure equity in access to available job opportunities for migrants and seasonal farmworkers. Other so-called priorities stem from a combination of related statutes, exeoutive orders, and public policy determinations." The Committee is aware of the difficulties facing the Public Em- ployment Services in regard to the needs of various applicant groups. 141 PAGENO="0752" 3372 Such difficulty and confusion surrounding priority services to various applicant groups supports an upgrading the VES director to' the level of Assistant Secretary in order to assure that veterans receive the services directed by statute and intended by Congress. Centralization of responsibility for veterans employment, within the Department of Labor, at the administrative level of Assistant Sec- retary was strongly supported in testimony before the Committee. Rep- resentatives of the Veterans of Foreign Wars testified last October that centralization at the administrative level of Assistant Secretary is the only way that the Veterans' Employment Service "will have au- thority commensurate with the responsibility". Representatives of The American Legion testified that a resolution favoring the Assist- ant Secretary for Veteran Affairs was approved at the 1975 American Legion National Convention. That resolution stated that as an Assist- ant Secretary, "the head of Veterans' Employment * * * would have the necessary direct access to the `Secretary of Labor * * * The American Legion believes this is the only answer to the dilemma of unemploy- ment facing over half a million veterans." The Paralyzed Veterans of America, in written testimony submitted to the Committee in regard to Amendment No. 2005 to S. 969, testified that "creating the position of an Assistant Secretary of Labor for Veterans' Employment is desirable and necessary". And the American Veterans of World War II, Korea and Vietnam (AMVETS), in testimony before the Committee, recommended that "the position of Director of Veterans' Employment Service be elevated to the position of Assistant Secretary of Lthor for Veterans' Affairs * * * [such elevation] has the full and unqualified support of our organization". Thus, the Committee hopes that elevation of the Director of Vet- erans' Employment Service to the position of Assistant Secretary will produce the responsiveness to veteran problems within the Depart- ment of Labor which has been lacking to date. Section 602 This section amends section 2003 of title 38 to clarify and make specific the responsibility of the State Veterans' Employment Repre- sentatives (SVERs) and the Assistant Veterans' Employment Repre- sentatives (AVERs) for the promotion and monitoring of veteran participation in' programs operating pursuant to the Comprehensive Employment and Training Act (CETA). Currently, SVERs and AVERs (who are Federal employees) are responsible to the Secretary of Labor. They administer and monitor the counseling and placement policies afforded to veterans by the public employment services. Further, they are administratively responsible for overseeing veteran participation in manpower and training programs administered by the `Secretary. The Comprehensive Employment and Training Act established a decentralized manpower program wherein the prime sponsor is responsible for program design with Federal influence being exerted through Department of Labor's technical assistance, plan approval process, and monitoring of prime sponsor's activity. Thus, extension of the administrative responsibilities of SVERs and AVERs to include thOse programs administered by prime sponsors is intended to assure continuing oversight on the part of the Department of Labor concern- ing participation of veterans in those programs. 142 PAGENO="0753" 3373 Regulations promulgated by the Department of Labor on April 9, 1976, would require prime sponsors iii their title I grant narrative to include assurances that "special consideration (will be) given to needs of unemployed disabled veterans, special veterans and veterans dis- charged within 4 years of the date of application and special out- reach and coordination efforts to serve such veterans (will be under- taken) ." Title I of CETA establishes a program to provide comprehensive manpower services throughout the Nation, including the development and creation of job opportunities and the training~ education and other services needed to enable individuals to secure and retain employment at their maximum capacity. Titles II and VI of the Act, as implemented, contain similar veteran "special consideration" requirements. Those titles authorize public service employment and manpower training programs in areas of sub- stantial unemployment. The Committee takes cognizance `of the recent action by the Senate with respect to H.R~ 12987, the Emergency Jobs Programs Extension Act of 1976. The accompanying report (S. Rept. 94-503) noted that the enrollment figures for veterans in the CETA program "compare most unfavorably with those of veterans under the Emergency Em- ployment Act of 1971 (EEA), where specific hiring goals were established by EEA regulations, requiring generally that 30 percent of `new hire' positions be filled with Vietnam era veterans." For example, only 5.2 percent of all new participants in CETA title I programs were "Special Vietnam" veterans, despite the continued high unemployment among veterans, particularly younger, minority, and disabled veterans. The Committee believes that if SVERs actively monitor the imple- mentation and operation of CETA programs, it is likely that veteran participation will increase. The Committee expects SVERs to examine t:he grant narratives submitted by prime sponsors within their jurisdic- tion with sufficient thoroughness to assure that "special consideration" is `accorded th eligible veterans whenever required or appropriate. Further, the Committee expects SVERs to* devote sufficient time monitoring prime sponsor's programs to ascertain that the assurances concerning veterans, as certified by the prime sponsor in the grant narrative are, in fact, complied with. Clawse 1 amends section 2003 to extend the duties of SVERs and AVERs to include administrative responsibility for manpower and training programs administered by prime sponsors under the Com- prehensive and Employment Training Act as such programs relate to veterans. Clauses ~, 8, and 4 add a new provision to section 2003 which extends the duties of SVERs to include the promotion of participation of veterans in CETA and the monitoring of the implementation and operation of CETA programs to assure that eligible veterans receive special consideration when required. SVERs are directed to cooperate. with the public employment staffs and the staffs of CETA prime sponsors in order to achieve greater veteran participation in CETA. Section 603 Amendments made by this section clarify the provisions of sec- tion 2006 (a) of title 38 concerning estimates of funds necessary for the proper and efficient administration of chapter 41 by the Veterans' 143~ 78-226 0 - 77 - 48 (FL 4) PAGENO="0754" 3374 Employment Service. The Secretary of Labor is directed by 2006 (a) to estimate the funds necessary for job counseling, training, and place- ment services for veterans and eligible persons. Such estimated funds must be included each year as a special item in the Department of Labor's annual budget. This section also requires each State Public Employment Service Agency (federally funded pursuant to the Wagner-Peyser Act) to identify separately in their budget, the funds necessary forjob counseling, placement, and training services to eligi- ble veterans and eligible survivors and dependents. Committee over- sight has disclosed that these provisions have frequently been ignored. Earlier this year, for example, the Department of Labor, in response to Committee inquiries, admitted that "funds allocated to the States are not separately identified in their budgets by special applicant groups". However, the Committee has since been assured by the Sec- retary that procedures have been established to bring them into com- pliance with the requirements of the law whereby the State agen- cies will "separately identify estimated amounts of funds required to serve veterans and other eligibles * * * including funds for coun- seling, placement, activities and enrollment in training". This amendment further clarifies and codifies the Committee's understanding and intention that the identified funds for counseling, placement, and training services for veterans will each be listed sep- arately by the reporting State rather than in the aggregate. Section 604 This section amends section 2007(c). Currently section 2007(c) re- quires the submission to Congress of an annual report by the Secretary of Labor on the success of the Department of Labor and its affiliated State employment service agencies in carrying out the provisions of chapter 41. Clause .7 makes technical amendments to section 2007 (a) to remove unnecessary and unwarranted gender references. Clause ~ amends section 2007(c) to require the Secretary to in- clude in his report the extent to which veterans were employed and en- rolled in public service employment positions. At the present time, the Secretary is required to make separate ref- erence to occupational training under appropriate Federal law. The Committee is aware that a narrow interpretation of such requirement could result in the Secretary's report covering only those veterans hired and trained under title I of the Comprehensive Employment and Training Act. Title I principally establishes a program of com- prehensive manpower services for training, education and other oc- cupational training services. However, titles II and VI of CETA are principally involved with public service employment and possibly* could be regarded as not covered under current reporting requirements. This amendment clarifies and makes specific the obligation of the Secretary of Labor to report and discuss in detail the entire CETA program as it relates to veterans. The Committee notes that the an- nual report submitted by the Secretary earlier this year did contain some reference to titles II and VI of CETA. However, the Com- mittee expects that there will be more detailed information concern- ing participation in CETA programs by recently discharged eligible veterans, veterans with service-connected di~abilities, other eligible 144 ~ PAGENO="0755" 3375 veterans and eligible persons in future reports. The Committee further expects that wide distribution of the recently completed technical as- sistance guide (TAG) entitled "Veterans and CETA" (with an ap- propriate emphasis thereof) coupled with the increased monitoring of the implementation and operation of prime sponsor programs (as con- templated by section 602 of this Act) will enable the Secretary to report next year that an increased percentage of "special veterans" and eligible persons have participated in CETA. Ulau8e S further amends section 2007 (c) to require the Secretary to include in his annual report any and all determinations made under section 2007(a). Currently, under that subsection, the Secretary of Labor is empowered to determine whether a State employment service agency has committed sufficient staff to ensure that veterans are receiv- ing the employment services mandated by law. Further, the Secretary is directed to arrange for necessary corrective action in those instances where he finds that the State's staff resources are inadequate. The Com- mittee expects that the 1977 report by the Secretary will contain a separate section listing each determination made by the Secretary pursuant to section 2007(a) in addition to a listing of those deter- minations made pursuant to section 2004 and section 2006 as presently required by law. Finally, the Committee intends that such report in- clude a statement of reasons for any such determination. (See also section 605 of this Act which adds additional reporting requirements.) Section 605 This section amends section 2012 concerning veterans' employment emphasis under Federal contracts to require the Secretary to include in the annual report (required by section 2007) detailed information as to complaints filed pursuant to section 2012(b). Under 2012(a) each party contracting with the United States in the amount of $10,000 or more for the procurement of personal property and nonpersonal serv- ices (including construction) is required "to take affirmative action to employ and advance in employment qualified disabled veterans and veterans of the Vietnam era." Although this unneeded provision was included as section 402 of the Vietnam Era Veterans' Readjustment Assistance Act of 1974. regulations implementing the section only became effective on July 28, 1976. The Committee intends that the complaint procedures outlined in section 2012(b) to afford remedies to those `disabled `and Vietnam era veterans who believe that a contractor has failed to comply with the affirmative action provisions be actively implemented and enforced by the Department of Labor. In this connection the Committee is deeply distressed over the failure of the United States Employment Service to seek greater compliance with `the mandatory listing requirements codified at section 2007. The Committee believes that. inclusion in the annual report of the number of complaints filed pursuant to section 2012(b), the actions taken t.hereof, and the resolution thereof will provide additional information to enable the Committee to gage the effectiveness and efficiency of the affirmative. action program. Section 605 also requires the Secretary to include in his annual re- port the number of contractors listing suitable employment openings, the nature, types and number of such positions, and the number of veterans who receive priority in regard to the listed openings. At the present time, sections 2012(a) (1) and (2) require each contractor with 145 PAGENO="0756" 3376 a contract with the Federal Government of greater than $10,000 to list suitable job openings with the appropriate local employm~nt office.. Veterans then receive priority in regard to such employment openings. The Committee is disturbed by the recent, undisputed, published re- port in the Wall Street Journal which noted that "most (covered) companies are busy dodging a slacky enforced" mandatory listing requirement. In its report accompanying the Vietnam Era Veterans' Readjustment Assistance Act of 1974, this Committee stated "[Alt a minimum, the Committee believes that there must be a good faith list- ing of job openings and a good faith consideration by Federal contrac- tors and subcontractors of qualifying veterans seeking prospective employment." Based on the undisputed article and other information presented to it, the Committee has concluded that the Department of Labor has failed to require compliance with the vigor necessary to assure the suc- cess of the program. The Committee believes that the mandatory listing requirement, if implemented properly, would result in more and higher quality jobs being listed with the Employment Service and in turn, increase the employment opportunities for the Vietnam veterans and disabled veterans seeking assistance~ from USES. The Committee is also concerned by published reports that four out of five jobs listed with the Employment Service call for low skilled workers and that over 75 percent of covered employers have never filled a single professional position through USES. In this regard, the Committee believes that the inclusion in the annual report of the nature (that is, duration, blue-collar-white-collar, wage, and benefits) and type (that is, job classification, position) of jobs listed will enable the Committee to determine whether, and to what extent, the manda- tory listing program is in compliance with the law. The Committee expects that the Department of Labor will aggressively seek to secure compliance with the mandatory listing provisions. Section 606 This section makes technical amendments to chapter 41 including the removal of unwarranted and unnecessary gender references. Those sections affected are: 2003,2004,2005, and 2008. This section also amends section 2004 to include chapter 35 eligible persons arnon~ those preferred for Local Veterans' Employment Rep- resentative (lIVER) positions. Most local Employment Service offices are required to assign one or more employees whose time shall be fully devoted to veterans' employment. Section 2004 currently directs that the person appointed should "preferably be an eligible veteran". This amendment adds chapter 35 eligible persons to eligible veterans as people also to be preferred in the LVER slots. Provisions contained in the Vietnam Era Veterans' Readjustment Assistance Act of 1974 (section 401 of Public Law 93-508) amended chapter 41 to extend employment assistance benefits to the spouse of: (1) Any veteran who died of a service-connected disability; (2) any member of the armed services on active duty who, at the time of ap- plication for benefits under chapter 41, has been listed for more than 90 days as missing in action, captured in the line of duty by hostile forces, or forcibly detained or interned in the line of duty by a for- eign government or power; and (3) any veteran with a service-con- nected disability rated total and permanent in nature. 146 PAGENO="0757" 3377 Because LVERs now render employment assistance services to chapter 35 eligible wives and widows, in addition to veterans, the Coni- mittee believes it consistent to extend preference in filling those posi- tions to them as well. Section 607 This section makes technical amendments to chapter 42 to remove unwarranted and unnecessary gender references. Those sections affected are: 2011 and 2012. Section 608 This section makes technical amendments to chapter 43 to remove unwarranted and unnecessary gender references. Those sections affected are: 2021 and 2024. TITLE VII-.MISCELLANEOUS AND EFFECTIVE DATE Section 701 This section amends section 3101 of title 38 relating to the non- assignability and exempt status of VA benefits by providing that when the payee of an educational benefit check has designated the address of an attorney-in-fact as the address for check receipt pur- poses and has also executed a power of attorney giving such attorney- in-fact the authority to negotiate the benefit check, such agreement will be held to be an assignment of the benefit and, as such, would be prohibited. Section 3101 (a) in pertinent part provides that: (a) Payments of benefits due or to become due under any law administered by the Veterans' Administration shall not be assignable except to the extent specifically authorized by law, and such payments made to, or on account of, a bene- ficiary shall be exempt from taxation, shall be exempt from the claim of creditors, and shall not be liable to attachment, levy, or seizure by or under any legal or equitable process whatever, either before or after the receipt by the beneficiary. * * This section has its roots in section 4745 of title 57 of the Revised Statutes of the United States, approved February 28, 1883. It was continued in section 28 of the War Risk Insurance Act of 1917 which provided that certain benefits under that act "shall not be assignable" and not subject to taxation or claims of creditors. While not identical, the same general language and substance were carried forward in section 22 of the World War Veterans Act of 1924. Thereafter, on August 12, 1935, section 3, Public Law 262, 74th Congress, enacted language substantially similar to that of the present statute. An amendment was enacted in 1940 which did not affect the substance of the law concerning assignability, and this provision was later super- seded by section 1001, Public Law 85-56 (38 TJ.S.C.A. 3001, 1954 ed.), and then codified as section 3101 (a) (Public Law 85-857) on Septem- ber 2, 1958. The opinions of the Office of General Counsel and judicial prec- edents indicate that, throughout its history, section 3101 has been recognized as having a twofold purpose avoid the possibility of the 147 PAGENO="0758" 3378 Veterans' Administration (or its predecessor agency) from being placed in the position of a collection agency and prevent the depriva- tion and depletion of the means of subsistence of veterans dependent upon these benefits as the main source of their income. Until 1972, whenever a question aroseconcerning written authoriza- tion by a veteran to pay a private debt from that veteran's benefits, it was uniformly interpreted as prohibited by statute. In 1923, for example, the General Counsel of the Veterans' Ad- ministration stated in part (23 Op. G. C. 251) with respect to a voluntary assignment or set-off in favor of private creditors that: It is not the policy of the Bureau that the district office should act as collection agents in matters relating to the private debts of its trainees. This same instruction rejecting the policy in case the trainees would also govern in case of employees or others who are receiving compensation from the Bureau. This was reaffirmed in 1958 when the General Counsel again held (Op. G. C. 3-58) that: A written authorization given by a veteran to pay for benefits payable to him a private debt would, if given effect, virtually make of the VA a collection agency and would partake of the nature of an assignment prohibited by section 3, Public Law 262, 74th Congress, 38 U.S.C., § 454(a). Such a written authorization w~uld not be honored. The following year the Comptroller General of the United States in a letter to the Administrator of Veterans' Affairs, dated May 29, 1959 (opinion B-105303) stated in part that: Based on the information furnished and informal discus- sions between our respective representatives we feel that the adoption of a procedure for payment of education and train- ing allowances "to an agent or attorney-in-fact," as proposed by the suggested change in the regulations, which it is under- stood implements the particular correspondence school plan presently under consideration, would be in contravention of the purpose and intent of the provisions of chapter 33, 38 U.S.C. 1631, which provide for payment of such allowances direct "to each eligible veteran" upon receipt of the certifica- tions required. It might also be in violation of Treasury De- partment Regulations~ section 5, Department Circular No. 21, as revised March 13, 1957, and the provisions of 38 U.S.C. 3101 prohibiting the assignment of benefit payments. It appears that the plan proposed by the school would be available to veterans only and, therefore, it may also contravene the pro- visions of 38 U.S.C. 1632(&~ providing that the allowance "shall be computed on the basis of the established charge which the institution requires nonveterans to pay for the course or courses pursued by the eligible veteran." The plan obviously is designed for the primary benefit and convenience of the school and might prove detrimental to the interest of the veterans. Furthermore, it is our view that the adoption of the plan as proposed by this institution, if approved, 148 PAGENO="0759" 3379 might lead to widespread use of similar plans by many other institutions including those offering residence courses, and would, therefore, greatly add to the administrative problems incident to the administration of the program. In 1969, the General Counsel was once again presented with n ques- tion on assignability; in this instance a power of attorney to flight schools to cash Government checks for education assistance allow- ances coupled generally with the change of address request by the veteran that the check be mailed to the institution was involved. There the General Counsel noted that: It is apparent from the aforecited opinions that any at- tempt to assign veterans benefits in a manner which would require the Veterans' Administration or the Treasury Depart- ment to make payment directly to the assignee is clearly barred `by section 3101 of title 38. Moreover, powers of attorney in the form involved in the instant cases do not meet the require- ments set out by the Comptroller General and now contained in VA Manual MP-4, part IV and Treasury Department Oir- cular 21. The matter now before us, however, differs in that in nei- ther case is any document presented to the Veterans' Admin- istration in an attempt to secure payment directly to the attorney-in-fact or the assignee. There is, instead, an attempt to accomplish the same result by two steps, i.e., (1) the veteran has submitted to the Veterans' Administration a request that his educational assistance allowance be mailed to him in care of the flying school and (2) has authorized the flying school to negotiate his check by a "special power of attorney" in one case and an "assignment and power of attorney" in the other case. Insofar as the change of address filed by the veteran is con- cerned, since section 3020 of title 38 provides for the payment of monetary benefits under laws administered by the Veterans' Administration, by check, and that such check shall be trans- mitted by mail to the payee thereof, at his last known address, we see no choice hut to transmit the veteran's check by mail to the address that the veteran has provided. After reviewing precedent the General Counsel (Op. G. C. 3-69) held that: The combination of circumstances existing in the present cases, i.e., the direction by the veteran to mail his check in care of the flying school and his execution of "a special power of attorney" or an "assignment and power of attorney" author- izing the flying school to negotiate such check, results in what `is tantamount to an `assignment of veterans educational as- sistance allowance to the flying school in contravention of sec- tion 3101 of title 38, United States Code. Despite the longstanding statutory prohibition against assignment of benefits and the well established precedent prohibiting use of powers of attorney, 3 years later on December 6, 1972, the Adminis- trator of Veterans' AiThirs abruptly and inexplicably reversed 149 PAGENO="0760" 3380 the prior opinions of the General Counsel and held "in light of prior opinions, the history of the law and the impact of today's economic and credit factors" that: The Veterans' Administration is without authority to with- hold benefit payment checks drawn in favor of its beneficiaries merely on the basis that the `beneficiary has attempted to sign such benefits and is required to mail such checks to the payees last known address or record with the VA, without regard to whatever disposition the beneficiary may make, or may have arranged for with reference to such payment. (Administra- tor's Decision VA No. 993.) Whatever judgment might be rendered as to the quality of legal scholarship embodied in that opinion, it soon became obvious that it permitted the effective assignment of benefits in contravention of Con- gressional intent, not only with respect to section 3101, but also with respect to basic intent of GI bill legislation since World War II, GI bill legislation has consistently provided that payment of educational benefits should go directly to the veteran rather than to the school. Unfortunately, the concern, expressed in 1959, that. permitting such power of attorney arrangements "might prove detrimental to the interest of veterans" and "greatly add to the administrative problems incident to the administration of the program" has become a self- fulfilled prophecy. The Veterans' Administration, in fully supporting the provisions of section 701, reported to the Committee that: In the administration of our educational programs, we have found many instances of abuse where school officials, their banks or agents have authority to receive and cash a benefici- ary's benefit check. These abuses have been especially prev- alent in the PREP, correspondence, and flight training pro- grams. Certifications showing the number of correspondence lessons taken by the individual and service by the school as well as the number of flight hours logged by the veteran have been signed by the veteran in blank in advance and have been cOmpleted by the school certifying, in some cases, lessons never taken or hours never flown. The Veterans' Administra- tion then pays for this training, the veteran or dependent never sees the check, and is unaware of its issuance or amount. We believe that to continue to permit such situations to oc- cur would be to encourage more fraud and open the door to even more potential abuse of the programs. We, therefore, fully support this provision of the substitute proposal. Although it is reasonable to anticipate that improper payments will be curtailed and that outlays will thus be reduced by enactment of this section, the Veterans' Administration is without sufficient data upon which to base an estimate. Section 702 This section provides that, unless otherwise provided, the amend- ments made by this Act are to become effective on October 1, 1976, the start of new fiscal year as contemplated by the new congressional budg- 150 PAGENO="0761" 3381 et process. The primary exception is title IV, the Post-Vietnam Era Veterans' Readjustment Assistance Act of 1977, which will be- come effective on January 1, 1977, replacing the current chapter 34 benefit program for those entering the services on or after that date. * * * * * * * 151 ~, PAGENO="0762" 3382 CHANGES IN ExIsTING LAW MADE BY S. 969, AS AMENDED In accordance with subsection 4 of Rule XXIX of the Standing Rules of the Senate, changes in existing law made by the bill, as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, existing law in which no change is proposed is shown in roman): TITLE 5-UNITED STATES CODE * * * * * PART 111-EMPLOYEES * * * * * * * Subpart D-Pay and Allowances * * * * * CHAPTER 53-PAY RATES AND SYSTEMS * * * * * * * Subchapter IT-Executive Schedule Pay Rates * *~ * * * * * § 5315. Positions at level TV Level IV of the Executive Schedule applies to the following posi- tions, for which the annual rate of basic pay shall be the rate deter- mined with respect to such level under chapter 11 of title 2, as adjusted by section 5318 of this title: (1) * * * * * * * * * * (20) Assistant Secretaries of Labor ((5)~ (6). * * * * * * * TITLE 29-LABOR* * * * * * * * CHAPTER 12-DEPARTMENT OF LABOR * * * * * * * § 553. Assistant Secretaries; appointment; duties There are established in the Department of Labor (fivel six offices of Assistant Secretary of Labor, which shall be filled by appointment by the President, by and with the advice and consent of the Senate. Each of the Assistant Secretaries of Labor shall perform such duties as may be prescribed by the Secretary of Labor or required by law. 282 PAGENO="0763" 3383 One of such Assistant Secretaries shall be an Assistant Secretary of Labor for Occupational Safety and Health. One of such Assistant Secretaries of Labor shall be an Assistant Secretary of Labor for Veterans' Employment. * * * * * * * TITLE 38-UNITED STATES CODE * * * * * * * PART Ill-READJUSTMENT AND RELATED BENEFITS CHAPTER Sec. 31. VocatIonal Rehabilitation 1501 32. Post-Vietnam Era Veterans' Readjustment Assistance 1601 34. Veterans' Educational Assistance 1G50 35. [War Orphans' and Widows'] ~Stnrvivors' and Dependents' Educational Assistance 1700 36. Administration of Educational Benefith 1770 37. Home, Condominium, and Mobile Home Loans 1801 39. Automobiles and Adaptive Equipment for Certain Disabled Veterans and Members of the Armed Forces 1901 41. Job Counseling, Training, and Placement Service for Veterans ~. 2001 42. Employment ana Training of Disabled and Vietnam Era Veterans~__ 2011 43. Veterans' Reemployment Rights 2021 CHAPTER 31-VOCATIONAL REHABILITATION * * * * * * * § 1502. Basic entitlement (a) Every veteran who is in need of vocational rehabilitation `on account of a serf-ice-ccinnected disability which is, or but for the receipt of retirement pay would be, compensable under chapter 11 of this title shall be furnished such vocational rehabilitation as may be prescribed by the Administrator, if such disability arose out of service during World War II or thereafter. (b) Unless a longer period is prescribed by the Administrator, no course of vocational rehabilitation may exceed four years. If the vet- eran has pursued an educational or training program under chapters 33 (prior to its repeal), 34, 35, or 36 of this title, such program shall be utilized to the fullest extent practical in determining the character and duration of the vocational rehabilitation to be furnished (him] the veteran under this chapter. (c) Vocational rehabilitation may not be afforded outside of a State to a veteran on account of post-World War II service if the veteran, at the time of such service, was not a citizen of the United States. (d) Veterans pursuing a program of vocational rehabilitation training under the provisions of this chapter shall also be eligible, where feasible, to perform veteran-student services pursuant to section 1685 of this title and for advance subsistence allowance payments as provided by section 1780 of this title. 283 PAGENO="0764" 3384 § 1503. Periods of eligibility (a) Unless .a longer period of eli~gibility is authorized pursuant to subsection (b) or (`c) of this section, vocational rehabilitation may not be a~fforded to a veteran after nine years following this] the veteran's discharge or release; except vocational rehabilitation may be afforded to any person until October 15, 1971, if such person is eligible for vocational rehabilitation by reason of a disability arising fron~i service before October 15, 1962, but eithor after World War II, and before the Korean conflict, or after the Korean conflict. (b) Where a veteran is prevented from entering, or having entered, from completing vocational rehabilitation training within the period of eligibility described in subsection (a) of this section because- (1) (he] the veteran had not timely attained, retained, or re- gained medical feasibility for training because of disability; (2) (he] the veteran had not timely met the requirement of a discharge or release under conditions other than dishonorable, but the nature of such discharge or release was later changed by ap- propriate authority; or (3) [he] the veteran had not timelyestablished the existence of compensable service-connected disability, such training may be afforded (him] the veteran during a period not to exceed four years beyond the period of eligibility otherwise applicable to (him] the `veteran. (c) A veteran who is found to be in need of vocational rehabilita- tion to overcome the handicap of blindness, or other serious disability, resulting from a service-connected disability which affords basic eligi- bility for vocational rehabilitation under section 1502 of this title may be afforded such vocational rehabilitation after the termination date otherwise applicable to rhim] the veteran!', but not beyond ten years after such termination date, or June 30, 1975, whichever date is the later~] when sue/i action is determined by the Administrator to be necessary for such veteran based upon such veteran's disability and need for vocational rehabilitation, if- (1) (he] the veteran had not previously been rehabilitated (that is, rendered employable) as the result of training furnished under this chapter, or (2) such serious disability (whether blindness or otherwise) has developed from, or as a resuTt of, the worsening of (his] the veteran's service-connected disability since [he] the veteran was declared rehabilitated to the extent that it precludes (hisi the veteran, performing the duties of the occupation for which (he] the veteran was previously trained under this chapter. § 1504. Subsistence allowances (a) While pursuing a course of vocational rehabilitation training and for two months after (his] the veteran's employability is deter- mined, each veteran shall be paid a subsistence allowance as pre- scribed in this section. (b) The subsistence allowance of a veteran-trainee is to be deter- mined in accordance with the following table, and shall be. the monthly amount shown in column II, III, IV, or V (whichever is applicable as determined by the veteran's depend~ncy status) opposite the appró- priate type of traming as specified iuc~lumn I 284 PAGENO="0765" 3385 Col. I Col. II Col. III Col. IV Col. V No One Two More than two Type of training dependents dependent dependents dependents The amount on col. IV, plus the following for each de- pendent in excess of two: Institutional: Full-time $209 $259 $304 $22 Three-quarter_time 157 194 229 17 Half-time 105 130 152 11 Farm cooperative, apprentice, or other on-job training: Full-time 182 220 254 17 -~-- _. _.__ .__. -- .__~ .__ *.__ .. -- _. .__ _.___* --~ ._~ *___*_.*____ _.. -- _****. _*_._. --- _._ ---- .~_ Column I Column II Column III Column IV Column V .- .-.... -.-- .- .- .- ..-.-- .... .- -.--. Type of training No One Two More than two dependents - dependent dependents dependents ..... ... ...-. ... .. ... ... -... The amount in column IV, plus the fol- lowing for each depend- ent in excess of two: Institutional: Full-time $226 $580 $3~9 $24 Three-quarter-time 170 210 247 18 Half-time 113 140 165 12 Farm cooperative, apprentice, or other on-job training: Full-time 197 238 275 18 (c) Where the course of vocational rehabilitation training consists of training on the job by an employer, such employer shall be required to submit monthly to the Administrator a statement in writing show- ing any wage, conipensation, or other income paid by (him] the esrt- ployer to the veteran during the month, directly or indirectly. Based upon such written statements, the Administrator is authorized to reduce the subsistence allowance of such veteran to an amount consid- ered equitable and just. - (d) The Administrator shall define full-time and part-time train- ing in the case of all eligible veterans pursuing a course of vocational rehabilitation training under this chapter. § 1505. Leaves of absence The Administrator shall prescribe such regulations as (he] the Administrator deems necessary for granting leaves of absence to vet- erans pursuing a course of vocational rehabilitation training. Such leaves of absence shall not be granted to any veteran in excess of thirty days in any consecutive twelve months, except in exceptional circum- stances. During authorized leaves of absence, a veteran shall be consid- ered as pursuing [his] the veteran's course of vocational rehabilita- tion training. * * * * * * * - - 285 PAGENO="0766" 3386 § 1507. Loans to trainees The revolving fund which was established pursuant to part VII of Veterans Regulation Numbered 1(a) is continued in effect, and may be used by the Administrator, under regulations prescribed by (him] the Administrator, for making advances, not in excess of $200 in any case, to veterans commencing or undertaking courses of vocational rehabilitation. Such advances, and advances heretofore made, shall bear no interest and shall be repaid in such installments as may be deter- mined by the Administrator, by proper deductions from future pay- ments of subsistence allowance, compensation, pension, or retire- ment pay. § 1508. Regulations to promote good conduct The Administrator shall prescribe such rules and regulations as (he] the Administrator deems necessary in order to promote good conduct and cooperation on the part of veterans who are receiving vocational rehabilitation. Penalties for the breach of such rules and regulations may extend to (1) forfeiture by the offender for three months of subsistence allowance otl rwise payable, and (2) perma- nent disqualification for further vocati\ ~i rehabilitation. § 1509. Books, supplies, and equipment (a) Any books, supplies, or equipment furnished a veteran under this chapter shall be deemed released to (him] the veteran, except that if, because of fault on (hisi the veteran's part, (he] the veteran fails to complete the course of vocational rehabilitation, (he] the veteran may be required by the Administrator to return any or all of such books, supplies, or equipment not actually expended~ or to repay the reasonable value thereof. (b) Returned books, supplies, and equipment may be turned in to educational or training institutions for credit under such terms as may be approved by the Administrator, or may be disposed of in such other manner as (he] the Ad~irtinistrator may approve. § 1510. Vocational rehabilitation for hospitalized persons Vocational rehabilitation may be afforded under this chapter to any person who is hospitalized pending final discharge from the active military, naval, or air service, if (he] such person is qualified for such vocational rehabilitation in every respect except for discharge. No subsistence allowance shall be payable to any person while (he] such person is receiving vocational rehabilitation solely by reason of this section. § 1511.. Training and training facilities The Administrator shall prescribe and provide vocational rehabili- tation to veterans eligible therefor. For such purpose, the Adminis- trator may- (1) employ additional personnel and experts, as (he] the Ad'irtinistrator deems necessary; (2) utilize and extend Veterans' Administration facilities; (3) utilize facilities of any agency of the United States, or any facilities maintained by joint Federal and State contribu- tions; 286 PAGENO="0767" 3387 (4) provide, by agreement or contract with public or private institutions or establishments, for such additional training facili- ties as may be suitable and necessary; (5) cooperate with and employ the facilities of other govern- mental and State employment agencies for the purpose of placing in gainful employment persons who have received vocational rehabilitation. ATotwithetanding any other provision of law, the facilities of any agency of the United States, as designated in clause (3) of this section, may be used to provide unpaid training or work experience as part or all of a veteran's program of vocational rehabilitation when the Admtinistrator determines such training or work experience to be necessary to accomplish vocational rehabilitation. While pursuing such training or work experience, an uncompensated veteran shall be deemed an employee of the United States for the purposes of the benefits of chapter 81 of title 5 but not for the purposes of laws ad- ministered by the Civil Service Commission. CHAPTER 32-POST-VIETNAM ERA VETERANS' READJUSTMENT ASSISTANCE SUBCHAPTER I-PURPOSE; DEFINITIONS Sec. 1601. Purpose. 1602. Definitions. SUBCHAPTER Il-ELIGIBILITy; CONTRIBUTIONS; AND MATCHING FUND 1621. EligibIlity. .1622. Contributions; matching fund. 1623. Refunds of contribution3 upon disenrolinient. 16k2~. Death of participant. /625. Discharge or release under conditions which would bar use of benefits. SUBCHAPTER Ill-ENTITLEMENT; DURATION 1631. Entitlement; loan eligi&ility. 1632. Duration; limitations. SUBCHAPTER IV-ADMIN1STRATION 1641. Requirements. 1642. Outreach efforts. 1643. Reporting requirements. 1644. Deposits; reports. Subchapter I-Purpose; Definitions ~ 1601. Purpose It is the purpose of this chapter (1) to provide educational assistanee to those men and women who enter the Armed Forces after Decem- ber 31, 1976, (2) to assist young men and women in obtaining an edu- cation they might not otherwise be able to afford, and (3) to promote and assist the all volunteer military program of the United States by attracting qualified men and women to serve in the Armed Forces. 287 PAGENO="0768" 3388 § 1602. Definitions For the purposes of this chapter- (1) (A) The tern-t "eligible veteran" means any veteran who (i) initially entered military service on or after January 1, 1977, served on active duty for a period of mere than 180 days commencing on or after such date, and was discharged or released therefrom under conditions other than dishonorable, or (ii) initially entered military service on or after January 1, 1977, and was discharged or released from active duty after such date for a service-connected disability. (B) The requirement of discharge or release, prescribed in sub- paragraph (A), shall be waived in the case of any participant who has completed his or her first obligated period of active duty (which began after December 31, 1976) or 6 years of active duty (which began after December 31, 1976), whichever period is less. (C) For the purposes of subparagraplis (A) and (B), the ten "ac- tive duty" does not include any period during which an individual (i) was assigned full time by the Armed Forces to a civilian institution for a course of education which was substantially the same as established courses offered to civilians, (ii) served as a cadet or midshipman at one of the service academies. or (iii) served under the provisions of section 511 (d) of title 10 pursiiant to an enlistment in the Army National Guard or the Air National Guard, or as a Reserve for service in the Army Reserve, Naval Reserve, Air Force Reserve, Marine Corps Re- serve, or Coast Guard Reserve. (2) The terms "program of education" and "educational institu- tion" shall have the same meaning ascribed to them in sections 1652(b) and 1652(c), respectively, of this title. (3) The term "participant" is a person who is participating in the educational benefits program e8tabic~shed under this chapter. Subchapter li-Eligibility; Contributions; and Matching Fund § 1621. Eligibility (a) Each person entering military service on or after January 1, 1977, shall have the right to enroll in the educational benefits prograiim pravided by this chapter (hereinafter in this chapter referred to as the "program" except where the text indicates otherwise) at any time during such person's service on active duty. When a person elects to enroll in the program, suc.h person must participate for at least 12 consecutive months before disenrolling or suspending participation. (b) The requirement for 12 consecutive months of participation required by subsection (a) of this section shall not apply when (1) the participant suspends participation or disenrolls from the program because of personal hardship as defined in regulations issued ~o'intly by the Administrator and the Secretary of Defense (hereinafter in th2s chapter referred to as the "Secretary"), or (2) the participant is discharged or released from active duty. (c) A participant shall be permitted to suspend participation or disenroll from the program at the end of any 12-consecutive-month period of participation. If participation is suspended, the participant shall be eligible to make additional contributions to the program un- der such terms and condition$ as shall be prescribed by regulations issued jointly by the Administrator and the Secretary. 288 PAGENO="0769" 3389 (d) If a participant di$enrolls from the program, such participant forfeits any entitlement to benefits under the program except as pro- videci in subsection (e) of this section. A participant who clisenroils from the program is eligible for a refund of such participant's con- tributioizs as provided in section 1623 of this title. (e) A participant who has disenrolied may be permitted to reenroll in the program under 8UcIt condztion.s as shall be prescribed 2ozntly by the Administrator and the Secretary. § 1622. Contributions; matching fund (a) Each person electing to participate in the program shall agree to have a monthly deduction made from such person's military pay. Such monthly deduction shall be in any amount not less than $50 nor more than $75 except that tile amount must be divisible by 5. Any such amount contributed by the participant or contributed by the Secretary pursuant to subsection (c) of this section shall be deposited in a special educational funding account (hereinafter in this chapter referred to as the "fund") to be established in the Treasury of the United States. Contributions made by the participant shall be limited to a maa~imvnm of $~,700. (b) Except as otherwise provided in this chapter, each monthly contribution made by a participant under subsection (a) shall entitle the participant to matching funds from the Veterans' Administration at the rate of $2 for each $1 contributed by the participant. (c) The Secretary is authorized, to contribute to the fund of amy participant such contributions as the Secretary deems necessary or appropriate to encourage persons to enter or remain in the Armed Forces. The Secretary is authorized to issue such rules and regulations as the Secretary deems necessary or appropriate to implement the pro- visions of this subsection. § 1623. Refunds of contributions upon disenroliment (a) Contributions made to the program by a participant may be refunded only after the participant has disenrolled from the program or as provided in section 16~4. (b) If a participant disenrolls from the program prior to discharge or relea~e from~ active duty, such participant's contributions will be refunded on the date of the participant's discharge or release from active duty or within 60 days of receipt of notice by the Administrator of the participant's d2senroliment, whichever is later, except that re- funds may be made earlier in instances of hardship or other good reason as prescribed in regulations issued ~ointiy by the Administrator and the Secretary. (c) if a participant disenrolls from the program after discharge or release from active duty, the participant's contributions shall be refunded within 60 days of receipt of an application for a refund from the participant. (d) In the event the participant (1) dies while on active duty, (2) dies after discharge or release from active duty, or (3) disenrolls or is disenrolled from the program without having utilized any en- titlement, the participant may have accrued under the program, or, in the event the participant utilizes part of such participant's entitle- nwnt and disenrolls or is disenroiled from the program, the amount contributed by the Secretary under the authority of section 7622(c) remaining in the fund shall be refunded to the Secretary. 289 ` 78-226 0- 7? -49 (Pt.4) PAGENO="0770" 3390 § 1624. Death of participant (a) 1f a participant dies, the amount of such participant's unused contributions to the fund shall be paid (1) to the beneficiary or bene- ficiaries designated by such participant under such participant's Servicemen's Group Life Insurance policy, or (2) to the participant's estate if no beneficiary has been desiq'nated under such policy or if the participant is not insured under the Servicemen's Group Life Insurance program>. (74 If a participant dies after having been discharged or released from active duty and before using any or all of the contributions which the participant made to the fund, such unused contributions shall be paid as prescribed in subsection (a) of this section. § 1625. Discharge or release under conditions which would bar the use of benefits If a participant in the program is discharged or released from active duty under dishonorable conditions, such participant is auto- matirally disenrolled and any contributions made by such participant shall be refunded to such participant on the date of such participant's discharge or release from active duty or within 60 days from~ receipt of notice by the Administrator of such discharge or release, whichever is later. Subchapter JJJ-.Entitlement; Duration § 1631. Entitlement; loan eligibility (a) (1) A participant shall be entitled to a m in-turn pf 36 monthly benefit payments (or their equivalent in the event of part-time benefit payments). (2) The amount of the monthly payment to which any eligible veteran is entitled shall be ascertained by (A) adding all contribu- tions made to the fund by the eligible veteran, (B) multiplying the sum by 3, (C) adding all contributions made to the fund for such vet- eran by the Secretary, and (D) dividing the sum by the lesser of 36 or the numbe~ of months in which contributions were made by such veteran. (3) Payment of benefits under this chapter ma?,' be made only for periods of time during which an eligible veteran is actually enrolled in and pursuing an approved program. of education and, except as provided in paragraph (4), only after an eligible veteran has been discharged or released from active duty. (4) Payment of benefits under this chapter may be made after a participant has completed his or her first obligated period of active dut?J (which began after December 31, 1976) or 6 years of active duty (which. began after December 31. 1976), whichever veriod is less. (b) Any member of the Armed Forces varticiva.tinq in the program shall be eliaible to particivate in the Predischarge Education Pro- gram (PREP) autlwrieed by subchapter VI of chapter~4 of this title. (c) W1~en an eligible veteran is pursuing either a program of edu- cation. under this chapter by correspondence or a program of flight traininq. such eligible veteran's entitlement shall be charged at the rate of 1 nwnth~s entitlement for each m~onth of benefits paid to the 290 PAGENO="0771" 3391 eliqible veteran (computed on the basis of the formula provided in subsection (a) (~) of this section). (d) Eligible veterans participating in the program shall be eligible for education loans authorised by subchapter III of chapter 36 of this title in such amounts and on the same terms and conditions as pro- vided in such subchapter, except that the term "eligible veteran" as used in such subchapter shall be deemed to include "eligible veteran" as defined in this chapter. § 1632. Duration; limitations No educational assistance benefits shall be afforded an eligible vet- eran under this chapter beyond the date of 10 years after such veteran's last discharge or release from active duty. In the event an eligible veteran has not utili2ed any or all of such veteran's entitlement by the end of the 10-year period, such eligible veteran is automatically dis- enrolled and any contributions made by such veteran remaining in the fund shall be refunded to the veteran foiiowinq notice to the veteran and an application by the veteran for such refund. if no appiicatwn is received within 1 year from date of notice, it will be presumed for t~he purposes of subsection (a) of section 725s of title 31, that the indi- vidual's `whereabouts is unknown and the fund shall be transferred as directed in the last proviso of that subsection. Subchapter IV-Administration § 1641. Requirements The provisions of sections 1663, 1670, 1671, 1673, 1674, 1676, 1677, 1687 (c), 1683, 168.5, 1695, 1696, 1697, and 1698 of this title and the pro- visions of chapter 36 of this title, with the exception of sectibns 1777, 1780(c), and 1787, shall be applicable to the program~. § 7642. Outreach efforts The Administrator shall designate an appropriate official of the Veterans' Administration who shall cooperate `with and assist the Secretary (or any official designated by such Secretary as adndnistra- tivelty responsible for such matters) in carrying out an effective out- reach program to acquaint all persons entering or considering entry into the Armed Forces `with the benefits and advantages of the pro- gram provided for in this chapter. The outreach program shall be designed to advise and counsel each person entering and each person considering entry into the Armed Forces on or after January 1, 1977, with respect. to the benefits and advantages of enrollment in the pro- gram. § 1643. Reporting requirements The Administrator and the Secretary shall, `within 90 days after the date of enactment of this chapter, submit to the Committees on Veterans' Affairs of the Senate and House of Representatives a joint report containing their respective plans for implementation of the program provided for in this chapter. The Administrator and the Secretary shall submit to such committees a report each year detailing the operations of the program (including outreach efforts) during the preceding year. The first such annual report shall be submitted 15 months after the date of enactment of this section. 291 PAGENO="0772" 3392 § 1644. Deposits; reports Deductions m,ade by the Department of Defense from the military pay of any participant shall be promptly transferred to the Adminis- t~rator for deposit in the fund. The Secretary shall also submit to the Admzn2strator a report each month showing the `name, service num- ber, and the amount of the deduction made from the military pay of each initial enrollee, any contribution made by the Secretary pursuant to section 16~2(c), as `well a~ any changes in each participant's enroll~ ment and/or contribution. The report shall also include any addi- tional information the Administrator and the Secretary deem neces- sary to administer this program. The Administrator shall maintain ac- counts showing contributions made to the fund by individual part~ci- pants and by the Secretary as well as disbursements made from the fund in the form of benefits. CHAPTER 34~VETERANS' EDUCATIONAL ASSISTANCE * * * * * * SUBCHAPTER 111_ENROLLMENT 1670. Selection of program. 1671. Applications; approval. 1673. Disapproval of enrollment in certain courses. 1674. DiscontinuanCe for unsatisfactory conduct or progress. 1676. Education outside the United States. 1677. Flight training. * * * * * * N SUBCHAPTER vI_PREDISCHARGE EDUCATION PROGRAM 1695. Purpose; definition. 1696. Payment of educational a~slstance allowance. 1697. Educational and vocational guidance. (1697A.] 1698. Coordination with and participation by Department of Defense. Subchapter ~ * * * * * * § 1652. Definitions For the purposes of this chapter- (a)((1) The term "eligible veteran" means any veteran who (A) served on active duty for a period of more than 180 days any part of which occurred after January 31, 1955, and who was discharged or released therefrom under conditions other than dishonorable or (B) was discharged or released from active duty after such date for a service-connected disability.] (1) The term "eligible veteran" means t'~ny veteran who'- (A) served on active duty for a period of more than 180 days, any part of which occurred after January 31, 1955, and before January 1, 1977, and was discharged ar released there fr'o'rrb under conditions other than dishonorable; or (B) contracted with the Armed Forces and was enlisted in or assigned to a reserve component prior to January 1, 1977, and as a result of such enlistment or assignment served on active duty 292 PAGENO="0773" 3393 for a period of more than 180 days, any part of which commenced within 12 monthe after January 1, 1977, and was diecharged or released from such active duty under conditions other tho~n dis- honorable; or (U) was discharged or released from ~ictive duty, any part of which was performed after January 31, 1955, and before January 1, 1977, or following entrance into activ.3 service from an enlist- ment provided for under clause (B) of this paragraph, because of a service-connected disability. (2) The requirement of discharge or release, prescribed in para- graph (1) (A) or (B), shall be waived in the case of any individual who served more than one hundred and eighty days in an active-duty status for so long as (he] such individual continues on active duty without a break therein. (3) For purposes of paragraph (1) (A) and section 1661 (a), the term "active duty" does not include any period during which an indi- vidual (A) was assigned full time by the Armed Forces to a civilian institution for a course of education which was substantially the same as established courses offered to civilians, (B) served as a cadet or midshipman at one of the service academies, or (C) served under the provisions of section 511 (d) of title 10 pursuant to an enlistment in the Army National Guard or the Air National Guard or as a Reserve for service in the Army Reserve, Naval Reserve, Air Force Reserve, Marine Corps Reserve, or Coast Guard Reserve unless at some time subsequent to the completion of such period of active duty for training such individual served on active duty for a consecutive period of one year or more (not including and service as a cadet or midshipman at one of the service academies). (b) The term "program of education" means any curriculum or any combination of unit courses or subjects pursued at an educational institution which is generally accepted as necessary to fulfill require- ments for the attainment of a predetermined and identified educa- tional, professional, or vocational objective. Such term also means any curriculum of unit courses or subjects pursued at an educational institution which fulfill requirements for the attainment of more than one predetermined and identified educational, professional, or voca- tional objective if all the objectives pursued are generally recognized as being reasonably related to a single career field. Such term also means any unit course or subject, or combination of courses or sub- jects, pursued by an eligible veteran at an educational institution, required by the Administrator of the Small Business Administration as a condition to obtaining financial assistance under the provisions of 402(a) of the Economic Opportunity Act of 1964 (42 U.S.C. 2902(a)). (c) The term "educational institution" means any public or private elementary school, secondary school, vocational school, correspond- ence school, business school, junior college, teachers' college, college, normal school, professional school, university, or scientific or tech- nical institution, or other institution furnishing education for adults. (d) The term "dependent"means- (1) a child of an eligible veteran; (2) a dependent parent of an eligible veteran; and (3) the (wife] spouse of an eligible veteran. 293 PAGENO="0774" 3394 (e) For the purposes of this cha~pter and chapter 36 of this title, the term "training establishment" means any establishment providing apprentice or other training on the job, including those under the supervision of a college or university or any State department of edu- cation, or any State apprenticeship agency, or any State board of vocational education, or any joint apprenticeship committee, or the Bureau of Apprenticeship and Training established pursuant to chapter 4C of title 29, (United States Code,~ or any agency of the Federal Government authorized to supervise such training. (f) For the purposes of this' chapter and chapter 36 of this title, the term "institution of higher learning" meane a college, university, or similar institution, including a technical or business school, off ering postsecondary level academic instruction that leads to an associate or higher degree if the school is empowered by the appropriate State education authority under State law to grant an associate or higher degree. When there is no State law to authorize the granting of a de- gree, the school may be recognized as an institution of higher learning if it is accredited for degree p'rograms by a recognized aecrediting agency. Such term shall aleo include a hospital offering educational programs at the postsecondary level without regard to whether the hospital grants a postseco'ndary degree. (g) For the purposes of this chapter and chapter 36 of this title, the term "standard college degree" means an associate or higher de- / gree awarded by (1) eta institution of higher learning that is aecredi- / ted cc a collegiate institution by a recognized regional or national ac- crediting agency, or (~) an institution of higher learning that is a "candidate" for accreditation as that temm is used by the regional or national accrediti'ng agencies; or (3) an institution of higher learning upon completion of a course which is accredited by an agency recog- nized to accredit specialized degree-level programs. For the purpose of this section, the accrediting agency must be one recognized by the Oornmissioner of Education under the provisions of section 1775 of this title. Subchapter II-Eligibility and Entitlement § 1661. Eligibility; entitlement; duration Entitlement (a) Except as provided in subsection (c) and in the second sentence of this subsection, each eligible yeteran shall be entitled to educational assistance under this chapter or chapter 36 for a period of one and one-half months (or the equivalent thereof in part-time educational assistance) for each month or fraction thereof of (his~ the veteran's service on active duty after January 31,1955. If an eligible veteran has served a period of 18 months or more on active duty after January 31, 1955. and has been released from such service under conditions that would satisfy ~his~ the veteran's active duty obligation, or served for a period of less than. 18 niontlis .after such date and received a medical discharge because of service-connected disabilities, (hey the veteran shall be entitled to educational assistance under this chapter for a period of (36~ 45 months (or the equivalent thereof in part-time educa- 294 PAGENO="0775" 3395 tional assistance) (~lus an additional number of months, not exceeding nine, as may be utilized in pursuit of a program of education leading to a standard undergraduate college degree]. In the case of any person servinq on active duty on December 31, 1976, or a person whose eligibility is based on section 1652(a) (1) (B) of this chapter, the ending date for computing such person's entitlement shall be the date of suoh person's first discharge or release from active duty after December 31, 1976. Entitlement Limitations (b) Whenever the period of entitlement under this section of an eligible veteran who is enrolled in an educational institution regularly operated on the quarter or semester system ends during a quarter or semester, such period shall be extended to the termination of such unexpired quarter or semester. In educational institutions not operated on the quarter or semester system, whenever the period of eligibility ends after a major portion of the course is completed such period shall be extended to the end of the course or for twelve weeks; whichever is the lesser period. (c) Except as provided in ~suhsections (a) and] subsection (b) and in subchapters V and VI of this chapter, no eligible veteran shall re- ceive educational assistance under this chapter in excess of ~thirty-six] 45 months. ~ 1662. Time limitations for completing a program of education Delimiting Period for Completion (n) No educational assistance shall be afforded an eligible veteran under this chapter beyond the date 10 years after [his] the veteran's last discharge or release from active duty after January 31, 19~5; ex- cept that in the case of any eligible veteran who was prevented from initiating or completing such veteran's program. of education within such time period because of a physical or mental disability which was not the result of such veteran's own willful misconduct, such veteran shall, upon application, be granted an extension of the applicable delimiting period for such length of time as the Administrator deter- n-tines, from the evidence, that such veteran was prevented from initiat- ing or completing a program of education. Correction of Discharge (b) In the case of any eligible veteran who has been prevented, as determined by the Administrator, from completing a program of edu- cation under this chapter within the period prescribed by subsection (a), because (hel the veteran had not met the nature of discharge re- quirements of this chapter before a ch~inge, correction, or modification of a discharge. or dismi~sal made pursuant to section 1553 of title 10,. the correction of the militar-y records of the proper service department under section 1552 of title 10, or other corrective action by competent authority, then the lO-year delimiting period shall run from the date (his] the veteran's discharge or dismissal was changed, corrected, or modifl~ed. 295 PAGENO="0776" 3396 Savings Clause (c) In the case of any eligible veteran who was discharged or re- leased from active duty before the date for which an educational as- sistance allowance is first payable under this chapter, the 10-year de- limiting period shall run from such date, if it is later than the date which otherwise would be applicable. In the case of any eligible vet- eran who was discharged or released from active duty before the date of enactment of this sentence and who pursues a course of farm coop- erative training, apprenticeship or other training on the job, or flight training within the provisions of section 1677 of this chapter, the 10-year delimiting period shall run from the date of enactment of this sentence, if it is later than the date which would otherwise be applicable. (d) In the case of any veteran (1) who served on or after Jan- uary 31, 1955, (2) who became eligible for educationa~I assistance under the provisions of this chapter or chapter 36 of this title, and (3) who, subsequent to [his] the `veteran's last discharge or release from active duty, was captured and heTd as a prisoner of warby a for- eign government or power, there shall be excluded, in computing (his~ the veteran's 10-year period of eligibility for educational assistance, any period during which [hel the vete'iian was so detained and any period immediately following [his] the veteran's release from such detention during which [hel the vetevan was hospitalized at a mili- tary, civilian, or Veterans' Administration medical facility. § 1663. Educational and vocational counseling The Administrator (may arrange for educational and vocational counseling for veterans eligible for educational assistance under this chapter] shall make available to any eligible veteran, upon such vet- eran's request, coniprehtensive counseling services, including but `not limited to, vocational and educational counseling and testing. At such intervals as (he] the Administrator deems necessary, (he] the Ad~ ministrator shall make available information respecting the need for general education and for trained personnel in the various crafts, trades, and professions. Facilities of other Federal agencies collecting such information shall be utilized to the extent (he] the Adniinistra- to'i~ deems practicable. The Administrator s/tall carry out an effective outreach pro grain to acquaint all eligible veterans with the avaiiabil ity of said counseling, its benefits and advantages. Subchapter III-Enrollment § 1670. Selection of program Subject to the provisions of this chapter, each eligible veteran may select a program of education to assist `(him] the veteran in attaining an educational, professional, or vocational objective at any educa- tional institution (approved in accordance with chapter 36 of this title) selected by (him] the veteran, which will accept and retain (himi the veteran as a student or trainee in any field or branch of knowledge which such institution finds (him] the veteran qualified to undertake or pursue. 296 PAGENO="0777" 3397 § 1671. Applications; approval Any eligible veteran, or any person on active duty (after consul- tation with the appropriate service education officer), who desires to initiate a program of education under this chapter shall submit an application to the Administrator which shall be in such form, and contain such information, as the Administrator shall prescribe. The Administrator shall approve such application unless (he] the Ad- ministrator finds that such veteran or person is not eligible for or entitled to the educational assistance applied for, or that [his] the veteran's or person's program of education fails to meet any of the. requirements of this chapter, or that fhej the veteran or person is already qualified. The Administrator shall notify the veteran or person of the approval or disapproval of (his] the veteran's or person's application. § 1673. Disapproval of enrollment in certain courses (a) The Administrator shall not approve the enrollment of an eligible veteran in- (1) any bartending course or personality development course; (2) any sales or sales management course which does not pro- vide specialized training within a specific vocational field, or in any other course with a vocational objective, unless the eligible veteran or the institution offering such course submits justifica- tion showing that at least one-half of the persons who completed such course over the preceding two-year period, and who are not unavailable for employment, have been employed in the occupa- tional category for which the course was desigr~ed to provide training (but in computing the number of persons who completed such course over any such two-year period, there shall not be included the number of persons who completed such course with assistance under this title while serving on active duty); (oi) (3) any type of course which the Administrator finds to be avocational or recreational in character (or the advertising for which (hej the Administrator finds contains significant avoca- tional or recreational themes) unless the veteran submits justifi- cation showing that the course will he of bona fide use in the pursuit of (hisj the veteran's present or contemplated business or occupation'(.]; or (4) any independent study program ececept one leading to a standard college degree. (b) Except as provide.d in section 1677 of this title, the Administrator shall not approve the enrollment of an eligible veteran in any course of flight training other than one given by an educa- tional institution of higher learning for credit toward a standard college degree the eligible veteran is seeking. (c) The Administrator shall not approve the enrollment of an eligible veteran in any course to be pursued by open circuit television (except as herein provided) or radio. The Administrator may..~p- prove the enrolhnent of an eligible veteran in a course, to be pursued in residence, leading to a standard college degree which includes, as an integral part thereof,. subjects offered through the medium of open circuit television, if the major portion of the course requires conven- tional classroom or laboratory attendance. 297 PAGENO="0778" 3398 (ci) The Administrator shall not approve the enrollment of any eligible veteran, not already enrolled, in any course (other than one offered pursuant to subchapter V or subchapter VI of this chapter or any farm cooperative training course) ~which does not lead to a stand- ard college degree and which is offered by a proprietary profit or pro- prietary nonprofit educational institution] for any period during which the Administrator finds that more than 85 per centum of the students enrolled in the course are having all or part of their tuition, fees, or other charges paid to or for them by the educational institution, the Veterans' Administration under this title and/or by grants from any Federal agency. The Administrator may waive the requirements of this subsection with respect to grants from any Federal agency upon the recommendation of the Secretary of Health, Education, and Welfare if the Administrator determ%nes it to be in the interest of the eligible veteran. § 1674. Discontinuance for unsatisfactory conduct or progress The Administrator shall discontinue the educational assistance allowance of an eligible veteran if, at any time, the Administrator finds that according to the regularly prescribed standards and prac- tices of the educational institution, [his] the veteran's conduct or progress is unsatisfactory. Progress will be considered unsatisfaetory at any time the eligible veteran is not progressing at a rate that will permit such veteran to graduate within the approved length of the course based on the training time as certified to the Veterans' Admin- istration unless the Administrator finds there are mitigating circum- 8tances. The Administrator may renew the payment of the educational assistance allowance only if [he] the Administrator finds that- (1) the cause of the unsatisfactory conduct or progress of the eligible veteran has been removed; and (2) the program which the eligible veteran now proposes to pursue (whether the same or revised) is suitable to (his] the veteran's aptitudes, interests, and abilities. § 1676. Education outside the United States An eligible veteran may not pursue a program of education at an educational institution which is not located in a State, unless such program is pursued at an approved educational institution of higher learning. The Administrator in this~ the Administrator's discretion may deny or discontinue the educational assistance under this chapter of any veteran in a foreign educational institution if (he] the Admin- istrator finds that such enrollment is not for the best interest of the veteran or the Government. § 1677. Flight training (a) The Administrator may approve the pursuit by an eligible veteran of flight training where such training is generally accepted as necessary for the attainment of a recognized vocational objective in the field of aviation or where generally recognized as ancillary to the pursuit of a vocational endeavor other than aviation, subject to the following conditions: (1) the eligible veteran must possess a valid private pilot's license and meet the medical requirements necessary for a com- mercial pilot's license; and 298 PAGENO="0779" 339~) (2) the flight school courses must meet the Federal Aviation Administration standards and be approved beth by that Agency and the appropriate State approving agency. (b) Each eligible veteran who is pursuing a program of education consisting exclusively of flight training approved as meeting the requirements of subsection (a) hereof, shall be paid an educational assistance allowance to be computed at the rate of 90 per centum of the established charges for tuition and fees which similarly circumstanced non-veterans enrolled in the same flight course are required to pay. Such allowance shall be paid monthly upon receipt of a certification as required by section 1681 (c) of this title. In each such case the eligi- ble veteran's period of entitlement shall be charged with one month for each $270 which is paid to the veteran as an educational assistance allowance for such course. Subchapter IV-Payments to Eligible Veterans; Veteran-Student Services § 1681. Educational assistance allowance General (a) The Administrator shall, in accordance with the applicable provisions of this section and (section 1780~ chapter 36 of this title, pay to each eligible veteran who is pursuing a program of education under this chapter an educational assistance allowance to meet, in part, the expenses of (hisi the veteran's subsistence, tuition, fees, supplies, books, equipment, and other educational costs. Institutional Training (b) The educational assistance allowance of an eligible veteran pursuing a program of education, other than a program exclusively by correspondence or a program of flight training, at an educational institution shall be paid as provided in (section 1780] chapter 36 of this title. Flight Training (c) No educational assistance allowance for any month shall be paid to an eligible veteran who is pursuing a program of education consisting exclusively of flight training until the Administrator shall have received a certification from the eligible veteran and the institu- tion as to actual flight training received by, and the cost thereof to, the veteran during that month. § 1682. Computation of educational assistance allowances (a) (1) Except as. provided in subsection (b), or (c) of this sec- tion, or section 1677 or 1787 of this title, while pursuing a program of education under this chapter of half-time or more, each eligible veteran shall be paid the monthly educational assistance allowance set forth in column II, III, IV, or V (whichever is applicable as deter- mined by the veteran's dependency status) opposite the applicable type of program as shown in column I: 299 PAGENO="0780" 3400 II Column III Column IV Column V More than two No dependents One dependent Two dependents dependents . The amount in column IV, plus the following for each dependent in excess of two: $270 $32' 240 $360 275 17 203 182 11 135 289 17 217 column II Column III Column IV Column V No dependents One dependent Two dependents More than two dependents The amount in column IV, plus the fol- lowing for each dependent in excess of two: $292 219 $847 260 297 198 18 12 146 174 276 318 18 255 (2) A "Cooperative" program, other than a "farm cooperative" program, means a full-time program of education which consists of institutional courses and alternate phases of training in the business or industrial establishment with the training in the business or indus- trial establishment being strictly supplemental to the institutional portion. (b) The educational assistance allowance of an individual pursu- ing a program of education- (1) while on active duty, or (2) on less than a half-time basis, shall be computed at the rate of (A) the established charges for tuition and fees which the institution requires similarly circumstanced non- veterans enrolled in the same program to pay, or (B) [$270] $~9~ per month for a full-time course, whichever is the lesser. (c) (1) An eligible veteran who is enrolled in an educational insti- tution for a "farm cooperative" program consisting of institutional agricultural courses prescheduled to fall within 44 weeks of any period of 12 consecutive months and who pursues such program on- (A) a full time basis (a minimum of ten clock hours per week or four hundred and forty clock hours in such year prescheduled to provide not less than eighty clock hours in any 3-month period), (B) a three-quarter-time basis (a minimum of 7 clock hours per week), or (C) a half-time basis (a minimum of 5 clock hours per week) shall be eligible to receive an educational assistance allowance 300 PAGENO="0781" 3401 at the appropriate rate provided in the table in paragraph (2) of this subsection, if such eligible veteran is concurrently engaged in agricultural employment which is relevant to such institu- tional agricultural courses as determined under standards pre- scribed by the Administrator. In computing the foregoing clock hour requirements there shall be included the time involved in field trips and individual and group instruction sponsored and conducted by the educational institution through a duly author- ized instructor of such institution in which the veteran is enrolled. (2) The monthly educational assistance allowance of an eligible veteran pursuing a farm cooperative program under this chapter shall be paid as set forth in column II, III, IV, or V (whichever is appli- cable as determined by the veteran's dependency status) opposite the basis shown in column I: N Column I Column II Column III Column IV Column V Basis No One Two More than two dependents dependent dependents dependents Full-time Three-quarter-time Half-time L The amount in column IV, plus the following for each dependent in excess of two: $17 $255 $289 $17 163 191 218 13 109 128 145 9 -___________ column I C'olumn II Column III Column IV column Basis No One Two More thp.n dependents dependent dependents two dependenti Full-time Three-quarter-time Half-time The amount in column IV, plus the fol- lowing for eac~ dependent in excess of two: $2$5 $276 $813 $18 176 207 585 14 118 158 167 9 (d) (1) Notwithstanding the prohibition in section 1671 of this title prohibiting enrollment of an eligible veteran in a program of educa- tion in which such veteran has "already qualified," a veteran shall be allowed up to six months of educational assistance (or the equivalent thereof in part-time assistance) for the pursuit of refresher training to permit such veteran to update such veteran's knowledge and skills and to be instructed in the technological advances which have occurred in such veteran's field of employment during and since the period of such veteran's active military service. (2) A veteran pursuing refresher training under this subsection shall be paid an educational assistance allowance based upon the rate prescribed in the table in subsection (a) (1) or in subsection (c) (2) of this section, whichever is applicable. (3) The educational assistance allowance paid under the authority of this subsection shall be charged against the period of entitlement the veteran has earned pursuant to section 1661 (a) of this title. 301 PAGENO="0782" 3402 (e) The educational assistance allo'wance of an eligible veteran pur- suing an independent study program which leads to a standard college decree shall be computed at the rate provided in subsection (b) (2) of this section. In those cases where independent study is combined with resident training and the resident training constitutes the major por- tion of such training, the macciimwm allowance may not exceed the full-time inetitutional allowance provided under subsection (a) (1) of this section. § 1683~ Approval of courses An eligible veteran shall receive the benefits of this chapter while enrolled in a course of education offered by an educational institution only if such course is approved in accordance with the provisions of subchapter I of chapter 36 of this title. § 1684. Apprenticeship or other on-job training; correspondence courses Any eligible veteran may pursue a program of apprenticeship or other on-job training or a program of education exclusively by cor- respondence and be paid an educational assistance allowance or train- ing assistance allowance, as applicable, under the provisions of section 1787 or 178$ of this title. § 1685. Veteran-student services (a) Veteran-students utilized under the authority of subsection (b) of this section shall be paid an additional educational assistance al- lowance (hereafter referred to as "work-study allowance"). Such work-study allowance shall be paid in the amount of $625 in return for such veteran-student's agreement to perform services, during or be- tween periods of enrollment, aggregating two hundred and fifty hours during a semester or other applicable enrollment period, required in connection with (1) the outreach services program under subchapter IV of chapter 3 of this title as carried out under the supervision of a Veterans' Administration employee, (2) the preparation and process- ing of necessary papers and other documents at educational institu- tions or regional offices or facilities of the Veterans' Administration, (3) the provision of hospital and domiciliary care and medical treat- ment under chapter 17 of this title, or (4) any other activity of the Veterans' Administration as the Administrator shall determine ap- propriate. An agreement may be entered into for the performance of services for periods of less than two hundred and fifty hours, in which case the amount of the work-study allowance to be paid shall bear the same ratio to the number of hours of work agreed to be performed as $625 bears to two hundred and fifty hours. In the case of any agree- ment providing for the performance of services for one hundred hours or more, the veteran student shall be paid $250 in advance, and in the case of any agreement for the performance of services for less than one hundred hours, the amount of the advance payment shall bear the same ratio to the number of hours of work agreed to be performed as $625 bears to two hundred and fifty hours. (b) Notwithstanding any other provision of law, the Administra- tor shall utilize, in connection with the activities specified in subsec- tion (a) of this section, the services of veteran-students who are pursuing full-time programs of education or training under chapters 302 PAGENO="0783" 3403 31 and 34 of this title. In carrying out this section, the Administrator, wherever feasible, shall give priority to veterans with disabilities rated at 30 per centum or more for purposes of chapter 11 of this title. Zn the event the veteran ceases to be a full-time stvdent before corn- pleting such agreement, the veteran may, with the approval of the Administrator, be permitted to complete such agreement. (c) The Administrator shall determine the number of veterans whose services the Veterans' Administration can effectively utilize and the types of services that such veterans may be required to per- form, on the basis of a survey, which (hey the Administrator shall conduct annually, of each Veterans' Administration regional office in order to determine the numbers of veteran-students whose services can effectively be utilized during an enrollment period in each geographi- cal area where Veterans' Administration activities are conducted, and shall determine which veteran-students shall be offered agreements under this section in accordance with regulations which ~he3J the `Administrator shall prescribe, including as criteria (1) the need of the veteran to augment ~his~ the veteran's educational assistance or subsistence allowance; (2) the availability to the. veteran of trans- portation to the place where (his~ the veteran's services are to be performed; (3) the motivation of the veteran; and (4) in the case of a disabled veteran pursuing a course of vocational rehabilitation under chapter 31 of this title, the compatibility of the work assign- ment to the veteran's physical condition. (d) `While performing the services authorized by this section, vet- eran-students shall be deemed employees of the `United States for the purposes of the benefits of chapter 81 of title 5 but not for the pur- poses of laws administered by the Civil Service Commission. * * * * * * * Subchapter V-Special Assistance for the Educationally Disadvantaged * * * * * * * § 1691. Elementary and secondary education and preparatory educational assistance (a) In the case of any eligible veteran not on active duty who- (1) has not received a secondary school diploma (or an equiv- alency certificate) at the time of [his] the veteran's discharge or release from active duty, or (2) in order to pursue a program of education for which [hey the veteran would otherwise be eligible, needs refresher courses, deficiency courses, or other preparatory or special educational assistance to qualify for admission to an appropriate educational institution, the Administratoi~rn~y, without regard to so much of the provisions of section 1671 as prohibit~th~-enrollmei~t of an eligible veteran in a program of education in which (he] the veteran is "already qualified", approve the enrollment of such veteran in an appropriate course or courses or other special educational assistance program. 303 PAGENO="0784" 3404 (b) The Administrator shall pay to an eligible veteran pursuing a course or courses or program pursuant to subsection (a) of this sec- tion, an educational assistance allowance as provided in section 1681 and 1682 (a) or (b) .of this title. § 1692. Special supplementary assistance (a) In the case of any eligible veteran who- (1) is enrolled in and pursuing a postsecondary course of edu- cation on a half-time or more basis at an educational institution; and (2) has a deficiency in a subject required as a part of, or which is a prerequisite to, or which is indispensable to the satisfactory pursuit of, an approved program of education, the Administrator may approve individualized tutorial assistance for such veteran if such assistance is necessary for the veteran to complete such program successfully. A veteran enrolled in and pursuing an institutional or techinical course not leading to a standard college degree, who has not received a high school diploma or equivalency certificate, may, subject to such regulatians as the Administrator shall prescribe, be entitled to receive tutorial assistance. Such assist- ance shall be limited to the academic portions of such a course and may not be granted in connection with the laboratory or shop portions or to any courses provided under section 1691 or section 1695 of this title. (b) The Administrator sha1'l~ pay to an eligible veteran receiving tutorial assistance pursuant>to subsection (a) of this sectioii, in addi- tion to the educational assistance allowance provided in section 1682 of this title, the cost of/such tutorial assistance in an amount not to exceed ($601 $65 per ,rñonth, for a maximum of twelve months, or i~ntil a maximum of~[$720] $780 is utilized, upon certification by the educational institution that- (1) the individualized tutorial assistance is essential to correct a deficiency/of the eligible veteran in a subject required as a part of, or whi!=h is prerequisite to, or which is indispensable to the satisfact~ty pursuit of, an approved program of education; * (2) ~ihe tutor chosen to perform such assistance is qualified; and (3) the charges for such assistance do not exceed the customary charges for such tutorial assistance. * * * * * * * Subchapter VI-Predischarge Education Program * * * * * * * § 1696. Payment of educational assistance allowance (a) The Administrator shall, under such regulations as (hej the Administrator shall prescribe after consultation with the Secretary of Defense, pay the educational assistance allowance as computed in subsection (b) of this section to an eligible person enrolled in and pursurng (1) a course or courses offered by an educational institution (other than by correspondence) and required to receive a secondary school diploma, or (2) any deficiency, remedial, or refresher course or courses offered by an educational institution and required for or preparatory to the pursuit of an appropriate course or training pro- 304 - PAGENO="0785" 3405 gram in an approved educational institution or training establishment. (b) The educational assistance allowance of an eligible person pur- suing education or training under this subchapter shall be computed at the rate of (1) the established charges for tuition and fees which the educational institution requires similarly circumstanced non- veterans enrolled in the same or a similar program to pay, and the cost of books and supplies peculiar to the course which such educa- tional institution requires similarly circumstanced nonveterans en- rolled in the same or a similar program to have, or (2) [$27O~ $~9~ per month for a full-time course, whichever is the lesser. Where it is determined that there is no same program, the Administrator shall establish appropriate rates for tuition and fees designed to allow reimbursement for reasonable costs for the education or training institution. (c) The educational assistance allowance authorized by this section shall be paid without charge to any period of entitlement earned pur- suant to section 1661 (a) of this title. § 1697. Educational and vocational guidance The Administrator shall, to the extent that professional counselors are available, provide, by contract or otherwise, educational and voca- tional guidance to persons eligible for educational assistance under this subchapter. [~ 1697A.] § 1698. Coordination with and participation by Depart- ment of Defense (a) The Administrator shall designate an appropriate official of the Veterans' Administration who shall cooperate with and assist the Secretary of Defense and the official [he] t/?e Adrninistrat~r desig- nates as administratively responsible for such matters, in carrying out functions and duties of the Department of Defense under the PREP program authorized by this subchapter. It shall be the duty of such official to assist the Secretary of Defense in all matters entailing co- operation or coordination between the Department of Defense and the Veterans' Administration in providing training facilities and released time from duty necessary to carry out the purposes of the program. (b) Educational institutions and training establishments admin- istered by or under contract to the Department of Defense providing education and training to persons serving on active duty with the Armed Forces shall, in accordance with regulations jointly prescribed by the Administrator and the Secretary of Defense, be. approved for the enrollment of eligible persons only at such time as the Secretary submits to the Committees on Veterans' Affairs of the Senate and House of Representatives a report containing such Department's plan for Implementation of the program established under this subchapter (except that on-going programs of education and training at such institutions or establishment.s may he continued for ninety days after the date of enactment nf fhs section and prior to the submission of such report), and periodically thereaf~er submits Progress reports with respect to the implementation of such plan, which plan shall include provision for- (1) each Secretary concerned to undertake an information and outreach program designed to advise, counsel, and encourage each ehigthle person within each branch of the Armed `Forces with 78-226 0 - 77 - 50 (Pt. 4) 305 PAGENO="0786" 3406 respect to enrollment in a program under this subchapter, with particular emphasis upon programs under sections 1691 (a) (2.) and 1696 (a) (2) of this title, and in all other programs for which such person, prior to or following discharge or release from active duty, may be eligible under chapters 31 and 34 of this title; (2) each Secretary concerned to undertake, in coordination with representatives of the Veterans' Administration, to arrange and carry out meetings with each approved educational institu- tion located in the vicinity of an Armed Forces installation (or, in the case of installations overseas, which have the capacity to carry out such programs at such overseas installations) to encour- age the establishment of a program by such institution under this subchapter and subchapter V of this chapter in connection with persons stationed at such installation, with particular emphasis upon programs under sections 1691 (a) (2). and 16~6 (a) (2) of this title; (3) the release from duty assignment of any such eligible per- son for at least one-half of the hours required for such person to enroll in a full-time program of education or training under this subchapter during ~his~ suc1~ person's military service, unless, pursuant to regulations prescribed by the Secretary concerned, it is determined that such release of time is inconsistent with the interests of the national defense; and (4) establishment of an Inter-Service and Agency Coordinat- ing Committee, under the co-chairmanship of an Assistant Secre- tary of Defense and the Chief Benefits Director of the Veterans' Administration, to promote and coordinate the establishment and conduct of programs under this subc1~apter and other provisions of this title and the implementation of the plan submitted pursu- ant to this section. CHAPTER 35~~WAR ORPHANS' AND WIDOWS'I SUR- VIVORS' AND DEPENDENTS' EDUCATIONAL ASSIST- ANCE * * * * * * Subchapter I-Definitions § 1700. Purpose The Congress hereby declares that the educational program estab- lished by this chapter is for the purpose of providing opportunities for education to children whose education would otherwise be impeded or interrupted by reason of the disability or death of a parent from a disease or injury incurred or aggravated in the Armed Forces after the beginning of the Spanish-American War, and for the purpose of aid- ing such children in attaining the. educational status which they might normally have aspired to and obtained but for the disability or death of such parent. .The Congress further declares that the educational program extended to the j~widows~ o~urviving spouses of veterans who died of service-connected disabilities and to .~wives~ spOW9CS of vet- erans with a service-connected total disability permanent in nature is for the purpose of assisting them in preparing to support them- selves and their families at a standard of living level which the veteran, but for ~his~ the veteran's death or service disability, could have expected to provide for ~his~ the veteran's family. 306 PAGENO="0787" 3407 § 1701. Definitions (a) For the purpose of this chapter- (1) The term "eligible person" means- (A) a child of a person who- (i) died of a service-connected disability, (ii) has a total disability permanent in nature resulting from a service-connected disability, or who died while a dis- ability so evaluated was in existence, or (iii) at the time of application for benefits under this chapter is a member of the Armed Forces serving on active duty listed, pursuant to section 556 of title 37, United States Code, and regulations issued thereunder by the Secretary concerned in one or more of the following categories and has been so listed for a total of more than ninety days: (A) missing in action, (B) captured in line of duty by a hostile force, or (C) forcibly detained or interned in line of duty by a foreign government or power, (B) the [widow] suPviving spow~e of any person who died of a service-connected disability, (C) the [wife~ spouse of any member of the Armed Forces serving on active duty who, at the time of application for benefits under this chapter is listed, pursuant to section 556 of title 37, United States Code, and regulations issued thereunder, by the Secretary concerned in one or more of the following categories and has been so listed for a total of more than ninety days: (i) missing in action, (ii) captured in line of duty by a hostile force, or (iii) forcibly detained or interned in line of duty by a foreign government or power, or (D) the [wife~ spoii.se of any person who has a total disability permanent in nature resulting from a service-connected disability, or the ~widow~ surviving spouse of a veteran who died while a disability so evaluated was in existence, arising out of active military, naval, or air service after the beginning of the Spanish-American War, but only if such service did not termi- nate under dishonorable conditions. The standards and criteria for determining whether or not a disability arising out of such service is service connected shall be those applicable under chapter 11 of this title. (2) The term "child" includes individuals who are married and individuals who are above the age of twenty-three years. (3) The term "duty with the Armed Forces" as used in section 1712 of this title means (A) active duty, (B) active duty for training for a period of six or more consecutive months, or (C) active duty for training required by section 511 (d) of title 10. (4) The term "guardian" includes a fiduciary legally appointed by a court of competent jurisdiction, or any other person who has been appointed by the Administrator under section 3202 of this title to receive payment of benefits for the use and benefit of the eligible person. (5) The term "program of education" mea:~s any curriculum or any combination of unit courses or subjects pursued at an educational insti- tution which is generally accepted as necessary to fulfill the require- ment for the attainment of a predetermined and identified educa- tional, professional, or vocational objective. 307 PAGENO="0788" 3408 (6) The term "educational institution" means any public or private secondary school, vocational school, correspondence school, business school, junior college, teachers' college, college, normal school, pro- fessional school, university, or scientific or technical institution, or any other institution if it furnishes education at the secondary school level or above. (7) The term "special restorative training" means training fur- nished under subchapter V of this chapter. (8) The term "total disability permanent in nature" means any disability rated total for the purposes of disability compensation which is based upon an impairment reasonably certain to continue throughout the life of the disabled person. * (9) For the purposes of this chapter and chapter 36 of this title, the term "training establishment" means any establishment provid- ing apprentice or other training on the job, including those under the supervision of a college or university or any State department of education, or any State apprenticeship agency, or any State board of vocational education, or any joint apprenticeship committee, or the Bureau of Apprenticeship and Training established pursuant to chapter 4C of title 29, or any agency of the Federal Government authorized to supervise such training. (10) For the purposes of this chapter and chapter 36 of this title, the term "institution of higher learning" means a coliege,university, or similar institution, including a technical or business school, offering postsecondary level academic instruction that leads to an associate or higher degree if the school is empowered by the appropriate State edu- cation authority under State law to grant an associate or higher degree. When there is no State law to authorize the gra'mtirng of a degree, the school may be recognized as an institution of higher learning if it is accredited for degree programs by a recognized accrediting agency. Such term shall also include a hospital offering educational programs at the postsecondary level without regard to whether the hospital grants a postsecondary degree. (11) For the purposes of this chapter and chapter 36 of this title, the term "stafrtdard college degree" means an associate or higher degree awarded by (A) an institution of higher learning that is accredited as a collegiate institution by a recognized regional or national accrediting agency; or (B) an institution of higher learning that is a "candidate" for accreditation as that term is used by the regional or national ac- crediting agencies; or (C) an institution of higher learning upon com- pletion of a course which is accredited by an agency recognized to ac- credit specialized degree-level programs. For the purpose of this sec- tion, the accrediting agency must be one recognized by the Commis- sioner of Education under the provisions of section 1775 of this title. (b'~ If an eligible person has attained (his~ the person's majority and is under no known legal disability, all references in this chapter to "parent or guardian" shall refer to the eligible person ~himsel~. (c) Any pfovision of this chapter which requires any action to be taken by or with respect to the parent or guardian of an eligible per- son who has not attained (his] sueh person's majority, or who, having attained (hisi such person's majority, is under a legal disability, shall not apply when the Administrator determines that its application would not be in the best interest of the eligible person, would result 308 PAGENO="0789" 3409 in undue delay, or would not be administratively feasible. In such a case the Administrator, where necessary to protect the interest of the eligible person, may designate some other person (who may be the eligible person [hnnself]) as the person by or with respect to whom the action so required should be taken. (d) No eligible person may be afforded educational assistance under this chapter unless (he] such person was discharged or released after each period (he] such person was on duty with the Armed Forces under conditions other than dishonorable, or while (he] such person is on duty with the Armed Forces. Subchapter 11-Eligibility and ~ntttIement § 1710. Eligibility and entitlement generally Each eligible person shall, subject to the provisions of this chapter, be entitled to receive educational assistance. § 1711. Duration of educational assIstance (a) Each eligible person shall be entitled to educational assIstance under this chapter for a period not in excess of (thirty-six] 45 months (or to the equivalent thereof in part-time training). (b) If any eligible person pursuing a program of education, or of special restorative training, under this chapter ceases to be an "eligible person" because- (1) the parent or spouse from whom eligibility is derived is found no longer to have a "total disability permanent in nature", as defined in section 1'IOl (a) (8) of this title, (2) the parent or spouse from whom eligibility is derived based upon the provisions of section 1701 (a) (1) (A) (iii) or 1701(a) (1) (C) of this title is no longer listed in one of the categories specified therein, or (3) [she] the sponse, as an eligible person under section 1701 (a) (1) (D) of this title, is divorced, without fault on (her] e~u.c1i perso&s part, from the person upon whose disability (herj such person's eligibility is based, then such eligible person (if (he or she] such person has sufficient re- maining entitlement) may, nevertheless, be afforded educational as- sistance under this chapter until the end of a quarter or semester ror which enrolled if the educational institution in which (he or she] such person is enrolled is operated on a quarter or semester system, or it the educational institution is not so operated until the end of the course, or until (nine] 12 weeks have expired, whichever first occurs. § 1712. Periods of eligibility (a) The educational assistance to which an eligible person (within the meaning of section 1701 (a) (1) (A)) is entitled under section 1711 of this title or subchapter V of this chapter may. be afforded (him] the person during the period beginning on (his] the person's eight- eenth birthday, or on the successful completion of [his] the person's secondary schooling, whichever first occurs, and ending on [his] the person's twenty-sixth birthday, except that- (1) if [he] the person is above the age of compulsory school attendance under applicable State law, and the Administrator 309. PAGENO="0790" 3410 determines that (his] the person's best interests will be served thereby, such period may begin before (his~ the person's eight- eenth birthday; (2) if (he] the person has a mental or physical handicap, and the Administrator determines that (his] the person's best inter- ests will be served, by pursuing a program of special restorative training or a specialized course of vocational training approved under section 1736 of this title, such period may begin before Ehis~ the person's eighteenth birthday, but not before (his] the person's fourteenth birthday. (3' if the Administrator first finds that the parent from whom eligibility is derived has a service-connected total disability per- manent in nature, or if the death of the parent from whom eligi- bility is derived occurs, after the eligible person's eighteenth birthday but before (his] the person's twenty-sixth birthday, then (unless paragraph (4) applies) such period shall end (five] 8 years after, whichever date last occurs (A) the date on which the Administrator first finds that the parent from whom eligi- bility is derived has a service-connected total disability perma- nent in nature, or (B) the date of death of the parent from whom eligibility is derived; (4) if (he] the person serves on duty with the Armed Forces as an eligible person after (his~ the person's eighteenth birthday but before (his] the person's twenty-sixth birthday, then such period shall end (five] 8 years after (his] the person's first dis- charge or release from such duty with the Armed Forces (exclud- ing from such (five] 8 years all periods during which the eligible person served on active duty before August 1, 1962, pursuant to (A) a call or order thereto issued to (him] the person as a Reserve after July 30, 1961, or (B) an extension of an enlistment, appoint- ment, or period of duty with the Armed Forces pursuant to sec- tion 2 of Public Law 87-117); however, in no event shall such period be extended beyond (his] the person's thirty-first birthday by reason of this paragraph; and (5) (A) if Ehe~ such person is enrolled in an educational institu- tion regularly operated on (a] the quarter or semester system and such period ends during (the last half of~ a quarter or semester, such period shall be extended to the end of the quarter or semester; or * (B) if (he] such person is enrolled in an educational institu- tion operated on other than (on] a quarter or semester system and such period ends (during the last half of the course] after a major portion of the course is completed, such period shall be extended to the end of the course, or until (nine] 12 weeks have expired, whichever first occurs. (b) No person made eligible by section 1701(a) (1) (B) or (D) of this chapter may be afforded educational assistance under this chapter beyond 10 years after whichever last occurs: (1) The date on which the Administrator first finds the spouse from whom eligibility is derived has a service-connected total dis- ability permanent in nature, or (2) The date of death of the spouse from whom eligibility is derived. 310 - PAGENO="0791" 3411 (c) Notwithstanding the provisions of subsection (a) of this sec- tion, an eligible person may be afforded educational assistance beyond the age limitation applicable to (him] such person under such sub- section if (1) (he] sue/i person suspends pursuit of (his] such person's program of education after having enrolled in such program within the time period applicable to (him] such person under such subsec- tion, (2) (he] such person is unable to complete such program after the period of suspension and before attaining the age limitation ap- plicable to (him] such person under such subsection, and (3) the Ad- ministrator finds that the suspension was due to conditions beyond the control of such person; but in no event shall educational assistance be afforded such person by reason of this subsection beyond the age limi- tation applicable to [him] such person under subsection (a) of this section plus a period of time equal to the period (he] such person was required to suspend the pursuit of Ehisi such person's program, or beyond (his~ such person's thirty-first birthday, whichever is earlier. ((d) Notwithstanding the provisions of subsection (a) of this sec- tion, an eligible person may be afforded educationa.1 assistance beyond the age limitation applicable to him under such subsection by a period of time equivalent to any period of time which elapses between the eighteenth birthday of such eligible person or the date on which an application for benefits of this chapter is filed on behalf of such eli- gible person, whichever is later, and the date of final approval of such application by the Administrator; but in no event shall educational assistance under this chapter be afforded an eligible person beyond his thirty-first birthday by reason of this subsection.] ((e)] (d) The term "first finds" as used in this section means the effective date of the rating or date of notification to the veteran from whom eligibility is derived establishing a service-connected total dis- ability permanent in nature whichever is more advantageous to the eligible person. [(f)] (e) No person made eligible by section 1701(a) (1) (0) of this title may be afforded educational assistance under this chapter beyond 10 years after the date on which (her] the spouse was listed by the Secretary concerned in one of the categories referred to in such section or the date of enactment of this subsection, whichever last occurs. ((g)] (f) Any entitlement used by any eligible person as a result of eligibility under the provisions of section 1701 (a) (1) (A) (iii) or 1701 (a) (1) (0) of this title shall be deducted from any entitlement to which [he] such person may subsequently become entitled under the provisions of this chapter. § 1713. Application The parent or guardian of a person (or the eligible person if such person has attained legal majority) for whom educational assistance is sought under this chapter shall submit an application to the Ad- ministrator which shall be in such form and contain such information as the Administrator shall prescribe. If the Administrator finds that the person on whose behalf the application is submitted is an eligible person, (he] tile Adn-iinistrator shall approve the application provi- sionally. The Administrator shall notify the parent or guardian or eligible person (if the person has attaine4 legal majorit7,I) of (his] the provisional approval or of [his] the disapproval of the application. * * * * * * * 311 PAGENO="0792" 3412 Subchapter III-.Program of Education § 1720. Development of educational plan (a) Upon provisional approval of an application for educational assistance for a person eligible within the meaning of section 1701 (a) (1) (A), the Administrator shall arrange for, and the eligible person shall take advantage of, educational or vocational counseling to assist the parent or guardian and the eligible person in selecting [his] such person's educational, vocational, or professional objective and in de veloping [his] such person's program of education. Such counseling shall not be required where the eligible person has been accepted for, or is pursuing, courses which lead to a standard college degree, at an approved institution. During, or after, such counseling, the parent or guardian shall prepare for the eligible person an educational plan which shall set forth the selected objective, the proposed program of education, a list of the educational institutions at which such program would be pursued, an estimate of the sum which would be required for tuition and fees in completion `of such program, and such other information as the Administrator shall require. This educational plan shall be signed by the parent or guardian and shall become an integral part of the application for educational assistance under this chapter. (b) The Administrator may, on request, arrange for educational counseling for persons eligible for educational assistance under sec- tion 1701 (a) (1) (B), (C), or (D) of this chapter. § 1721. Final approval of application The Administrator shall finally approve an application if [hel the Administrato'r finds (1) that section 1720 of this title has been complied with, (2) that the proposed program of education constitutes a "pro- gram of education" as that term is defined in this chapter, (3) that the eligible person is not already qualified, by reason of previous edu- cation or training, for the educational, professional, or vocational ob- jective for which the courses of the program of education are offered, and (4) that it does not appear that the pursuit of such program would violate any provision of this chapter. § 1723. Disapproval of enrollment in certain courses (a) The Administrator shall not approve the enrollment of an eligible person in- (1) any bartending course or personality development course; (2) any sales or sales management course which does not pro- vide specialized training within a specific vocational field, or in any other course with a vocational objective, unless the eligible person or the institution offering such course submits justification showing that at least one-half of the persons who completed such course over the preceding two-year period, and who are not unavailable for employment, have been employed in the occupa- tional category for which the course was designed to provide training (but in computing the number of persons who completed such course over any such two-year period, there shall not be included the number of persons who completed such course with assistance under this title while serving on active duty); [or] (3) any type of course which the Administrator finds to be avocational or recreational ,in character (or the advertising for 312 PAGENO="0793" 3413 which (he] the Administrator finds contains significant avoca- tional or recreational themes) unless the eligible person submits justification showing that the course will be of bona fide use in the pursuit of (his] the person's present or contemplated business or occupation[] ; or (4) any independent study program except one leading to a standard college degree. (b) The Administrator shall not approve the enrollment of an eligible person in any course of flight training other than one given by an educational institution of higher learning for credit toward a standard college degree the eligible person is seeking. (c) The Administrator shall not approve the enrollment of an eligible person in any course to be pursued by correspondence (except as provided in section 1788 of this title), open circuit television (except as herein provided), or a radio, or any course to be pursued at an educational institution not located in a State or in the Republic of the Philippines (except as herein provided). The Administrator may approve the enrollment of an eligible person in a course, to be pursued in residence, leading to a standard college degree which includes, as an integral part thereof, subjects offered through the medium of open circuit televised instruc- tion, if the major portion of the course requires conventional classroom or laboratory attendance. The Administrator may approve the enroll- ment at an educational institution which is not located in a State or in the Republic of the Philippines if such program is pursued at an approved educational institution of higher learning. The Adminis- trator in (his] the Administrator's discretion may deny or discontinue the educational assistance under this chapter of any eligible person in a foreign educational institution if (he] the Ad~niinistrator finds that such enrollment is not in the best interest of the eligible person or the Government. (d) The Administrator shall not approve the enrollment of au eligi- ble person in any course which is to be pursued as a part of ~his~ such person's regular secondary school education (except as provided in section 133 of this title), but this subsection shall not prevent the enrollment of an eligible person in a course not leading to a standard college degree if the Administrator finds that such person has ended [his] such person's secondary school education (by completion or otherwise) and that such course is a specialized vocational course pursued for the purpose of qualifying in a bona fide vocational objective. § 1724. Discontinuance for unsatisfactory progress The Administrator shall discontinue the educational assistance al- lowance on behalf of an eligible person if, at any time, the Admin- istrator finds that according to the regularly prescribed standards and practices of the educational institution (he] such person is attending, (h~s~ the person's conduct or progress is unsatisfactory. Progress will be considered unsatisfactory at any time an eligible person is not pro- gressing at a rate that will permit such person to graduate within the approved length of the course based on the training time as certilled to the TTeterans' Administration unless the Administrator finds there 313 PAGENO="0794" 3414 are ~mitigating circumstances. The Administrator may renew the pay- ment of the educational assistance allowance only if (he] the Acimin- istrcttor finds that- (1) the cause of the unsatisfactory conduct or progress of the eligible person has been removed; and (2) the program which the eligible person now proposes to pur- sue (whether the same or revised) is suitable to (his] the person's aptitudes, interests, and abilities. Subchapter IV-.--Payments to Eligible Persons § 1731. Educational assistance allowance (a) The Administrator shall, in accordance with the provisions of ~section 1780] chapter 36 of this title, pay to the parent or guardian of each eligible person who is pursuing a program of education under this chapter, and who applies therefor on behalf of such eligible per- son, an educational assistance allowance to meet, in part, the expenses of the eligible person's subsistence, tuition, fees, supplies, books, equip- ment, and other educational costs. (b) No educational assistance allowance shall be paid on behalf of an eligible person enrolled in a course in an educational institution which does not lead to a standard college degree for any period until the Administrator shall have received- (1) from the eligible person a certification as to (his] the person's actual attendance during such period; and (2) from the educational institution, a certification, or an en- dorsement on the eligible person's certificate, that (he] the person was enrolled in and pursuing a course of education during such period. § 1732. Computation of educational assistance allowance (a) (1) The educational assistance allowance on behalf of an eligible persOn who is pursuing a program of education consisting of institutional courses shall be computed at the rate prescribed in section 1682(a) (1) of this title for full-time, three-quarter-time, or half-time pursuit, as appropriate, of an institutional program by an eligible veteran with no dependents. (2) The educational assistance allowance on behalf of an eligible person pursuing a program of education on less than a half-time basis shall be computed at the rate prescribed in section 1682(b) (2) of this title for less-than-half-time pursuit of an institutional program by an eligible veteran. (b) The educational assistance allowance to be paid on behalf of an eligible person who is pursuing a full-time program of education which consists of institutional courses and alternate phases of train- ing in a business or industrial establishment with the training in the business or industrial establishment being strictly supplemental to the institutional portion, shall be computed at the rate of ($217] $235 per month. (c) (1) An eligible person who is enrolled in an educational institu- tion for a "farm cooperative" program consisting of institutional agri- cultural courses preseheduled to fall within forty-four weeks of any 314 PAGENO="0795" 3415 period of twelve consecutive months and who pursues such program on- (A) a full-time basis (a minimum of ten clock hours per week or four hundred and forty clock hours in such year prescheduled to provide not less than eighty clock hours in any three-month period), (B) a three-quarter-time basis (a minimum of seven clock hours per week), or (C) a half-time basis (a minimum of five clock hours per week), shall be eligible to receive an educational assistance allowance at the appropriate rate provided in paragraph (2) of this subsection, if such eligible person is concurrently engaged in agricultural employment which is relevant to such institutional agricultural courses as deter- mined under standards prescribed by the Administrator. In computing the foregoing clock hour requirements there shall be included the time involved in field trips and individual and group instruction sponsored and conducted by the educational institution through a duly authorized instructor or such institution in which the person is enrolled. (2) The monthly educational assistance allowance to be paid on behalf of an eligible person pursuing a farm cooperative program under this chapter shall be computed at a rate prescribed in section 1682(c) (2) of this title for full-time, three-quarter-time, or half-time pursuit, as appropriate, of a farm cooperative program by an eligible veteran with no dependents. (3) The monthly educational a$sistance allowance to be paid on behalf of an eligible person pursuing an i'ndependent study program which leads to a standard college degree shall be computed at the rate prescribed in section 1682(e) of this title. (d) If a program of education is pursued by an eligible person at an institution located in the Republic of the Philippines, the educa- tional assistance allowance computed for such person under this section shall be paid at a rate in Philippine pesos equivalent to $0.50 for each dollar. § 1733. Special assistance for the educationally disadvantaged (a) Any eligible (wife or widow] spov~e or surviving spouse shall, without charge to any entitlement (she] such spouse may have under section 1711 of this title, be entitled to the benefits provided an eligible veteran under section 1691 (if pursued in a State) of this title and be paid an educational assistance allowance under the provisions of sec- tion 1732(a) of this title. (b) Any eligible person shall, without charge to any entitlement (he] such person may have under section 1711 of this title, be entitled to the benefits provided an eligible veteran under section 1692 of this title. § 1734! Apprenticeship or other on-job training; correspondence courses (a) Any eligible person shall be entitled to pursue, in a State, a program of apprenticeship or other on-job training and be paid a training assistance allowance as provided in section 1787 of this title. 315 PAGENO="0796" 3416 (b) Any eligible (wife or widow] spouse or surviving spouse shall be entitled to pursue a program of education exclusively by corre- spondence and he paid as educational assistance allowance as provided in section 1786 of this title. § 1735. Approval of courses An eligible person shall receive the benefits of this chanter whih~ enrolled in a course of education offered by au educational institution only if such course (1) is approved in accordance with the provisions of subchapter I of chapter 36 of this title, or (2) is approved for the enrollment of the particular individual under the provisions of sec- tion 1736 of this title. § 1736. Specialized vocational training courses The Administrator may approve a specialized course of vocational training leading to a predetermined vocational objective for the enroll- ment of an eligible person under this subchapter if (he] the Adm,inis- trator finds that such course, either alone or when combined with other courses, constitutes a program of education which is suitable for that person and is required because of a mental or physical handicap. * * * * * * Subchapter V-~-Special Restorative Training * * ~. * * * § 1741. Entitlement to special restorative training (a) The Administrator at the request of the parent or guardian of an eligible person is authorized- (1) to determine whether such person is in need of special restor- ative training; and (2) where need is found to exist, to prescribe a course which is suitable to accomplish the purposes of this chapter. Such a course~ at the discretion of the Administrator, may contain ele- ments that would contribute toward an ultimate objective of a pro- gram of education. (b) The total period of educational assistance under this subchap- ter and other subchapters of this chapter may not exceed the amount of entitlement as established in section 1711 of this title, except that the Administrator may extend such period in the case of any person if (he~ the Administrator finds that additional assistance is necessary to accomplish the purpose of special restorative training as stated in subsection (a) of this section. § 1742. Special training allowance (a) While the eligible person is enrolled in and pursuing a full- time course of special restorative training, the parent or guardian shall be entitled to receive on behalf of such person a. special training al- lowance computed at the basic rate of ($270] $292 per month. If the charges for tuition and fees applicable to any such course are more 316 PAGENO="0797" 3417 than ($85j $9~ per calendar month, the basic monthly allowance may be increased by the amount that such charges exceed [$85] $9~ a month, upon election by the parent or guardian of the eligible person to have such person's period of entitlement reduced by one day for each [$P.02] $9.76 that the special training allowance paid exceeds the basic monthly allowance. (b) No payments of a special training allowance shall be made for the same period for which the payment of an educational assistance allowance is made or for any period during which the training is pursued on less than a full-time basis. (c) Full-time training for the purpose of this section shall be de- termined by the Admimstrator with respect to the capacities of the individual trainee. § 1743. Special administrative provisions (a) In carrying out (his] the Administrator's responsibilities under this chapter the Administrator may by agreement arrange with public or private educational institutions or others to provide training ar- rangernents as may be suitable and necessary to accomplish the pur- poses of this subchapter. In any instance where the Administrator finds that a customary tuition charge. is not applicable, [he] the Ad- nthiistrator m~y agree on the fair and reasonable amounts which may be charged the parent or guardian for the training provided to an eligible person. (b) The Administrator shall make such rules and regulations as Lhel C/ic Adiministrator may deem necessary in order to promote good conduct on the part of the persons who are following courses of spe- cial restorative training and otherwise to carry out the purposes of this chapter. Subchapter VI-.Misceilaneous Provisions § 1761. Authority and duties of Athuinistrator (a) The Administrator niay provide the educational and vocational counseling required under section 1720 of this title, and may provide or require additional counseling if (he] the Admministrator deems it to be necessary to accomplish the purposes of this chapter. (b) Where any provision of this chapter authorizes or requires any function, power, or duty to be exercised by a State, or by any officer or agency thereof, such function, power, or duty shall, with respect to the Republic of the Philippines, be exercised by the Admin- istrator. * * * * * * § 1763. Notification of elIgibility The Administrator shall notify the parent or guardian of each eligible person defined in section 1701(a) (1) (A) of this chapter of the educational assistance available to such person under this chapter. Such notification shall be provided not later than the month in which such eligible person attains (his] such person's thirtieth birthday or as soon thereafter as feasible. 317 PAGENO="0798" 3418 Subchapter Vu-Philippine Commonwealth Army and Philippine Scouts * * * * CHAPTER 3&-ADMINISTRATION OF EDUCATIONAL BENEFITS * * `p SUBCHAPTER It-MISCELLANEOUS PROVISIONS 1780. Payment of educational or subsistence assistance allowances. 1781. LimitatIons on educational assistance. 1782. Control by agencies of the United States. 1783. ConflictIng interests. 1784. Reports by Institutions; reporting fee. 1785. Overpayments to eligible persons or veterans. 1786. Correspondence courses. 1787. Apprenticeship or other on-job training. 1788. Measurement of courses. 1789. Period of operation for approval. 1790. Overcharges by educational institutions; discontinuance of allowances; examination of records; false or misleading statements. 1791. Change of program. 1792. Advisory committee. 1793. (Institutions listed by Attorney General] Cornpiiance 8urvey8. 1794. Use of other Federal agencies. (1795. LimItation on period of assistance under two or more programs.] 1796. Limitation on certain advertising, sales, and enrollment practices. * * `p * * `p * Subchapter I-State Approving Agencies * * * § 1771. Designation (a) Unless otherwise established by the law of the State concerned, the chief executive of each State is requested to create or designate a State department or agency, as the "State approving agency" for (his) such State for the purposes of this chapter and chapters 34 and 35 of this title. (b) (1) If any State fails or declines to create or designate a State approving agency, the provisions of this chapter which refer to the State approving agency shall, with respect to such State, be deemed to refer to the Administrator. (2.) In the case of courses subject to approval by the Administra~ tor under section 1772 of this title, the provisions of this chapter which refer to a State approving agency shall be deemed to refer to the Administrator. * * * * * * § 1774. Reimbursement of expenses (a) The Administrator is authorized to enter into contracts or agreements with State and local agencies to pay such State and local agencies for reasonable and necessary expenses of salary and travel incurred by employees of such agencies and an allowance for adminis- trative expenses in accordance with the formula contained in subsec- tion (b) of this section in (1) rendering necessary services in ascer- 318 PAGENO="0799" 3419 taming the qualifications of educational institutions for furnishing courses of education to eligible persons or veterans under this chapter and chapters 34 and 35, and in the supervision of such educational institutions, and (2) furnishing, at the request of the Administrator, any other services in connection with chapters 34 and. 35. Each such contract or agreement shall be conditioned upon compliance with the standards and provisions of chapters 34 and 35. The AcZnunistrator may also reimburse such agencies for work perfornied by their sub- contractors where such work has a direct relationship to the require- ment8 of chapter 32, 34, 35, or 36 of this title, and has had the prior approval of the Administrator. (b) The allowance for administrative expenses incurred pursuant to subsection (a) of this section shall be paid in accordance with the following formula: Allowance for a4minietrat~ve Totat ealary coet reLmbureable under tivis 8ectlon c~rpense $5,000 or less [$550] $600. Over $5,000 but not exceeding $10,000 ($1,000] $1,080. Over $10 000 but not exceeding $35,000 ($1,000] $1,080 for the first $10,000 plus ($925] $1,000 for each additional $5,000 or fraction thereof. Over $35,000 but not exceeding $40,000 [$6,050] $6,535. Over $40,000 but not exceeding $75,000 ($6,050] $6,535 for the first $40,000 plus ($800] $865 for each additional $5,000 or fraction thereof. Over $75,000 but not exceeding $80,000 ($12,000i $12,960. Over $80,000 ($12,000] $12,960 for the first $80,000 plus ($700] $755 for each additional $5,000 or fraction thereof. § 1775. Approval of accredited courses (a) A State approving agency may approve the courses offered by an educational institution when- (1) such courses have been accredited and approved by a nationally recognized accrediting agency or association; (2) such courses are conducted under sections 11-28 of title 20;or (3) such courses are accepted by the State department of edu- cation for credit for a teacher's certificate or a teacher's degree. For the purposes of this chapter the Commissioner of Education shall publish a list of nationally recognized accrediting agencies and asso- ciations which (he] the Coin~missioner determines to be reliable au- thority as to the quality of training offered by an educational institu- tion and the State approving agencies may, upon concurrence, utilize the accreditation of such accrediting associations or agencies for ap- proval of the courses specifically accredited and approved by such accrediting associatio~i or agency. In making application for ap- proval, the institution shall transmit to the State approving agency copies of its catalog or bulletin (.] which must be certified as true and correct in content and policy by an authorized representative of the school. The catalog or bulletin must specifically state its progress re- quirements for graduation and must include as a minimum the in/or- mati~n required by sections 1776(b) (6) and (7) of this title. 319 PAGENO="0800" 3420 (b) As a condition to approval under this section, the State approv- ing agency must find that adequate records are kept by the educational institution to show the progress of each eligible person or veteran and must include as a minimum (except for attendance) the requirements set forth in section 1776(c). (7) of this title. The State approving agency must also find that the educational institution maintains a written record of the previous education and training of the eligible person or veteran and clearly indicates that appropriate credit has been given by the institution for previous education and training, with the training period shortened proportionately and the eligible person or veteran and the Administrator so notified. * * * * * ~* * ~ 1777. Approval of training on the job (a) Any State approving agency may approve a program of train- ing on the job (other than a program of apprenticeship) only when it finds that the job which is the objective of the training is one in which progression and appointment to the next higher classification are based upon skills learned through organized and supervised train- ing on the job and not on such factors as length of service and normal turnover, and that the provisions of subsections (b) and (c) of this section are met. (b) The training establishment offering training which is desired to be approved for the purposes of this chapter must submit to the appropriate State approving agency a written application for ap- proval which, in addition to furnishing such information as is required by the State approving agency, contains a certification that- (1) the wages to be paid the eligible veteran or person (A) upon entrance into trnining, are not less than wages paid non~ veterans in the same training position and are at least 50 per centum of the wages paid for the job for which [he] the veteran or person is to be trained, and (B) such wages will be increased in regular periodic increments until, not later than the last full month of the training period, they will be at least 85 per centum of the wages paid for the job for which such eligible veteran or person is being trained; and (2) there is reasonable certainty that the job for which the eligible veteran or person is to be trained will be available to (him] the veteran or person at the end of the training period. (c) As a condition for approving a program of training on the job (other than a program of apprenticeship) the State approving agency must find upon investigation that the following criteria are met: (1) The training content of the course is adequate to qualify the eligible veteran or person for appointment to the job for which (he) the veteran or person is to be trained. (2) The job customarily requires full-time training for a period of not less than six months and not more than two years. (3) The length of the training period is not longer than that customarily required by the training establishments in the com- munity to provide an eligible veteran or person with the required skills, arrange for the acquiring of job knowledge, technical infor- mation, and other facts which the eligible veteran or person will 320 PAGENO="0801" 3421 need to learn in order to become competent on the job for which (he] the veteran or person is being trained. (4) Provision is made for related instruction for the individual eligible veteran or person who may need it. (5) There is in the training establishment adequate space, equipment, instructional material, and instructor personnel to provide satisfactory training on the job. (0) Adequate records are kept to show the progress made by each eligible veteran or person toward [his] such veteran's or person's job objective. (7) No course of training will be considered bona fide if given to an eligible veteran or person who is already qualified by train- ing and experience for the job. (8) A signed copy of the training agreement for each eligible veteran or person, including the training program and wage scale as approved by the State approving agency, is provided to the veteran or person and to the Administrator and the State approv- ing agency by the employer. (9'~ That the. course. meets such other criteria as may be estab- lished by the State approving agency. * * * * * * § 1779. Disapproval of courses (a) Any course approved for the purposes of this chapter which fails to meet any of the requirements of this chapter shall be imme- diately disapproved by the appropriate State ~pproving agency. An educational institution which has its courses disapproved by a State approving agency will be notified of such disapproval by a certified or registered letter of notification and a return receipt secured. (b) Each State approving agency shall notify the Administrator of each course which it has disapproved under this section. The Administrator shall notify the State approving agency of (his] the Administrator's disapproval of any educational institution under chapter 31 of this title. § 1780. Payment of educational assistance or subsistence allowances Period for Which Payment May Be Made (a) Payment of educational assistance or subsistence allowances to eligible veterans or eligible persons pursuing a program of educa- tion or training, other than a program by correspondence or a pro- gram of flight training, in an educational institution under chapter 31, 34. or 35 of this title shall be paid as provided in this section and, as applicable, in section 1504, 1682, 1691, or 1732 of this title. Such payments shall be paid only for the period of such veterans' or persons' enrollment, but no amount shall be paid- (1) to any eligible veteran or eligible person enrolled in a course which leads to a standard college degree for any period when such veteran or person is not pursuing (his] such veteran's or vereon's course in accordnnce with the regularly established policies and regulations of the educational institution and the 321 78-226 0 - 77 - 51 (Pt. 4) PAGENO="0802" 3422 requirements of this chapter or of chapter 34 or 35 of this title; ~or] (2) to any eligible veteran or eligible person enrolled in a course which does not lead to a standard college degree (excluding programs of apprenticeship and programs of other on-job train- ing authorized by section 1787 of this title) for any day of absence in excess of thirty days in a twelve-month period, not counting as absences weekends or legal holidays (or customary vacation peri- ods connected therewith) established by Federal or State law (or in the case of the Republic of the Philippines, Philippine law) during which the institution is not regularly in session[]; (3) to any eligible veteran or person for auditing a course; (4) to any eligible veteran or person for a course for which the grade assigned is not used in coimpntinq the requirements for graduation including a course from which the student withdraws unless the Adminiitrator finds there are mitigating circumstances; or (5) to any eligible veteran or person for pursuit of a program' of education exclusively by correspondence as authorized under section 1786 of this title or for the pursuit of a correspondence portion of a combination correspondence-residence course leading to a vocational objective where the nornvil period o.f time re- quired to complete such correspondence course or portion is less than 6 months. A certification as to the normal period of time re- quired to complete the course must be made to the Administrator by the educational institution. [Notwithstanding the foregoing, the Administrator may, subject to such regulations as he shall prescribe, continue to pay allowances to eligible veterans and eligible persons enrolled in courses set forth in clause (1) or (2) of this subsection during periods when the schools are temporarily closed under an established policy based upon an Executive order of the President or due to an emergency situation, and such periods shall not be counted as absences for the purposes of clause (2).] Notwithstanding the foregoinq, the Administrator may, suh~ect to such requlations as the Administrator shall ~`rescribe, contiivi,e to pay allowances to eligible veterans and eligible persons enrolled in courses set forth in clause (1) or (2) of this subsection'- (A ~) durina verods ~,`li~n the seb oois are temporarily closed under an established policy based upon an Executive order of the President or due to an emerqencll situation, and such iie-riods shall not be counted as absences for the purposes of clause (2'); (B') dvrina periods bet~',een eonseeuth'e ~ehoo7 terms `where such veterans or persons transfer from one apv-ro'ved educational insti- tution to another apvroved educationiil institution for the pur- pose of enrolling in and pursuing a similar course at the second institution if the period between such consecutive terms does not exceed 30 da'~is. but such periods shall be counted as absences for the m&rnoses of clause (2') or (U') during veriods between a semester, term, or quarter `where the edvcationa7 titutiort eertiiTes th~~ e'n'~'nl7ment of the eiiqzble veteran or eligible person on an individual semester, term, or 322 - PAGENO="0803" 3423 quarter basis if the interval between such periods does not exceed 2' full calendar month, but such periods shall be àounted as ab- sences for the purposes of clause (s). Correspondence Training Certifications (b) No educational assistance allowance shall be paid to an eligible veteran or (wife or widow] spouse or surviving spouse enrolled in and pursuing a program of education exclusively by correspondence until the Administrator shall have. received- (1) from the eligible veteran or (wife or widow] spouse or sur- viving spouse a certificate as to the number of lessons actually completed by the veteran or [wife or widow] spouse or surviv- ing spouse and serviced by the educational institution; and (2) from the training establishment a certification or an en- dorsement on the veteran's or (wife's or widow's~ spouse's or sur- vivinq spouse's certificate, as to tle number of lessons completed by the veteran or (wife or widow] spouse or surviving spouse and serviced by the institution. Apprenticeship and Other On-Job Training (c) No training assistance allowance shall be paid to an eligible veteran or eligible person enrolled in and pursuing a program of apprenticeship or other on-job training until the Administrator shall have received- (1) from such veteran or person a certification as to (his] such veteran's or person's actual attendance during such period; and (2) from the training establishment a certification, or an en- dorsement on the veteran's or person's certificate, that such vet- eran or person was enrolled in and pursuing a program of apprenticeship or other on-job, training during such period. Advance Payment of Initial Educational Assistance or Subsistence Allowance (d) (1) The educational assistance or subsistence allowance advance payment provided for in this subsection is based upon a finding by the Congress that eligible veterans and. eligible persons need additional funds at the beginning of a school term to meet the expenses of books, travel, denosits, and payment for living quarters, the initial install- ment of tuition, and the other special expenses which are concentrated at the beginning of a school term. (2) (Subject] Notwithstandine, any other provision of law, but sub ~eet to the provisions of this subsection, ~nd under regula- tions which the Administrator shall prescribe, an eligible veteran or elioihle person shall be paid an educational assistance allowance or subsistence allowance, as appropriate, advance payment. Such advance payment shall he made in an amount equivalent to the allowance for the month or fraction thereof in which pursuit of the program will commence, plus the allowance for the succeeding month. In the case of. a serviceman on active duty, who is pursuing a program of educa- tion (other than under subchapter VI of r~b~pter 3$), the advance 323 PAGENO="0804" 3424 payment shall be in a lump sum based upon the amount payable for the entire quarter, semester, or term, as applicable. In no event shall an advance payment be made under this subsection to a veteran or person intending to pursue a program of education on less than a half-time basis. The application for advance payment, to be made on a form prescribed by tbe Administrator, shall- (A) in the case of an initial enrollment of a veteran or person in an educational institution, contain information showing that the veteran or person (i) is e.ligbile for educational benefits, (ii) has been accepted by the institution, and (iii) has notified the institution of his intention to attend that institution; and (B) in the case of a re-enrollment of a veteran or person, con- tain information showing that the veteran or person (i) is eligible to continuc [his~ such veteran's or person's program of education or training and (ii) intends to re-enroll in the- same institution, and, in either case., shall also state the number of semester or clock- hours to be pursued by such veteran or person. (3) Subject to the provisions of this subsection, and under regu- lations which the Administrator shall prescribe, a person eligible for education or training under the provisions of subchapter VI of chapter 34 of this title shall be entitled to a lump-sum educational assistance allowance advance payment. Such advance payment shall in no event be made earlier than thirty days prior to the date on which pursuit of the person's program of education or training is to com- mence. The application for the advance payment, to be made on a form prescribed by the Administrator, shall, in addition to the infor- ination prescribed in paragraph (2) (A), specify- (A) that the program to be pursued has been approved; (B) the anticipated cost and the number of Carnegie, clock, or semester hours to be. pursued; and (C) where the program to be pursued is other than a high school credit course, the need of the person -to pursue the course or courses to be taken. (4) For purposes of the Administrator's determination whether any veteran or person is eligible for an advance payment under this section, the information submitted by the institution, the veteran or I)ersOn, shall establish Ehisj such veteran's or person's eligibility unless there is evidence in [hisi sw/cit veteran's or person's file in the processing office establishing that (hey the veteran or person is not eligible for such advance payment. (5) The advance payment authorized by paragraphs (2) and (3) of this subsection shall, in the case of an eligible veteran or eligible person, be (A) drawn in favor of the veteran or person; (B) mailed to the educational institution listed on the application form for tem- porary care and delivery to the veteran or person by such institution; and (C) delivered to the veteran or person upon [his] such veteran's or 2erso'n's registration at such institution, but in no event shall such delivery be made earlier than thirty days before the program of educa- tion is to commence. (G~ Upon delivery- of the advance payment pursuant to para- graph (5) of this subsection, the institution shall submit to the Administrator a certification of such delivery. If such delivery is not 324 - PAGENO="0805" 3425 effected within thirty days after commencement of the program of education in question, such institution, shall return such payment to the Administrator forthwith. Prepayment of Subsequent Educational Assista.nce or Subsistence Allowance (e) (Exceptj Notwithstandinq any other provision of law, and except as provided in subsection (g) of this section, subsequent payments of educational assistance or subsistence allowance to an eligible veteran or eligible person shall be prepaid each month, sub- ject to such reports and proof of enrollment in and satisfactory pursuit of such programs as the Administrator may require. The Administrator may withhold the final payment for a period of enroll- ment until such proof is received and the amount of the final payment appropriately adjusted. Recovery of Erroneous Payments (f) If an eligible veteran or eligible person fails to enroll in or pursue a course for which an educational assistance or subsistence allowance advance payment is made, the amount of such payment) and any amount of subsequent payments which. in whole or in part, are due to erroneous information required to be furnished under subsection (d) (2) and (3) of this section, shall become an overpayment and shall constitute a liability of such veteran or person to the United States and may be recovered, unless waived pursuant to section 3102 of this title, from any benefit otherwise due (him] ench veteran or person under any law administered by the Veterans' Administration or may be recovered in the same manner as any other debt due the United States. Payments for Less Than Half-Time Training (g) Payment of educational assistance allowance in the case of any eligible veteran or eligible person pursuing a program of education on less than a half-time basis (except as provided by subsection (d) (3) of this section) shall be made i.n an amount computed for the entire quarter, semester. or term during the month immediately following the month in which certification is received from the educational insti- tution that such veteran or person has enrolled in and is pursuing a program at such institution. Such lump sum payment shall be com- puted at the rate provided in section 1682(b) or 1732(a) (2) of this title, as applicable. Determination of Enrollment. Pursuit, and Attendance (h) The Administrator may, pursuant to regulations which ~he~ the Administrator shall prescribe, determine enrollment in, pursuit of, and attendance at, any program of education or training or course by an eligible veteran or eligible person for any period for which :~he~ the veteran or person receives an educational assistance or subsistence allowance under this chapter for pursuing such program or course. 325 PAGENO="0806" 3426 Subchapter TI-Miscellaneous Provisions § 1781. Limitations on educational assistance No educational assistance allowance granted under chapter 34, 35, or 36 of this title shall be paid to any eligible person (1) who is on active duty and is pursuing a course of education which is being paid for by the Armed Forces (or by the Department of Health, Education, and Welfare in the case of the Public Health Service); or (2) who is attending a course of education or training paid for under the Government Employees' Training Act and whose full salary is being paid to (him] such person while so training. * * * * * * § 1783. Conflicting interests (a) Every officer or employee of the Veterans' Administration who has, while such an officer or employee, owned any interest in, or re- ceived any wages, salary, dividends, profits, gratuities, or services from, any educational institution operated for profit in which an eligible person or veteran was pursuing a program of education or course under this chapter or chapter 34 or 35 shall be immediately dismissed from (his] such officer's or employee's office or employment. (b) If the Administrator finds that any person who is an officer or employee of a State approving agency has, while ~he~ such person was such an officer or employee, owned any interest in, or received any wages, salary, dividends, profits, gratuities, or services from, an educa- tional institution operated for profit in which an eligible person or veteran was pursuing a program of education or course under this chapter or chapter 34 or 35 of this title, ~hej3 the Administrator shall discontinue making payments under section 1774 of this title to such State approving agency unless such agency shall, without delay, take such steps as may be necessary to terminate the employment of such person and such payments shall not be resumed while such person is an officer or employee of the State approving agency, or State depart- ment of veterans' affairs or State department of education. (c) A State approving agency shall not approve any course offered by an educational institution operated for profit, and, if any such course has been approved, shall disapprove each such course, if it finds that any officer or employee of the Veterans' Administration or the State approving agency owns an interest in, or receives any wages, salary, dividends, profits, gratuities, or services from, such institution. (d) The Administrator may, after reasonable notice and public hearings, waive in writing the application of this section in the case of any officer or employee of the Veterans' Administration or of a State approving agency~ if (hey the Administrator finds that no detriment will result to the tTnited States or to eligible persons or veterans by reasons of such interest or connection of such officer or employee. § 1784. Reports by inatitutions; reporting fee (a) Educational institutions shall, without delay, report to the Administrator in the form prescribed by ~him]1 the Administrator, the enrollment, interruption, and termination of the education of each eligible person or veteran enrolled therein under chapter 34, 35, or 36. The date of interruption Or termination will be the last date of pursuit or, in the case of correspondence training, the last date a lesson was serviced by the school. ________ 326 PAGENO="0807" 3427 (b) The Administrator may pay to any educational institution, or to any joint apprenticeship training committee acting as a training establishment, furnishing education or training under either this chapter or chapter 34 or 35 of this title, a reporting fee which will be in lieu of any other compensation or reimbursement for reports or certifications which such educational institution or joint apprentice- ship training committee is required to submit to [him] the Adn~in- i~trator by law or regulation. Such reporting fee shall be computed for each calendar year by multiplying ($3] $5 by the number of eli- gible veterans or eligible persons enrolled under this chapter or chapter 34 or 35 of this title, or ($4~ $6 in the case of those eligible veterans and eligible persons whose educational assistance checks are directed in care of each institution for temporary custody and delivery and are deliv- ered at the time of registration as provided under section 1780(d) (5) of this title, on October 31 of that year; except that the Administrator may, where it is established by such educational institution or joint ap- prenticeship training committee that eligible veteran plus eligible per. son enroilnient on such date varies more than 15 per centum from the peak eligible veteran enrollment plus eligible person enrollment in such educational institution or joint apprenticeship training committee during such calendar year, establish such other date as representative of the peak enrollment as may be justified for such educational insti- tution or joint apprenticeship training committee. The reporting fee shall be paid to such educational institution or joint apprenticeship training committee as soon as feasible after th~ end of the calendar year for which it is applicable. * * * * * * § 1786. Correspondence courses (a) (1) Each eligible veteran (as defined in section 1652(a) (1) and (2) of this title) and each eligible (wife or widow] spouse or surviv- ing spouse (as defined in section 1701 (a) (1) (B)~ (C), or (D) of this title) who enters into an enrollment agreement to pursue a pro- gram of education exclusively by correspondence shall be paid an educational assistance allowance computed at the rate of 90 per centum of the established charge which the institution requires nonveterans to pay for the course or courses pursued by the eligible veteran or (wife or widow] spouse or surviving spouse. The term "established charge" as used herein means the charge for the course or courses deter- mined on the basis of the lowest extended time payment plan offered by the institution and approved by the appropriate State approving agency or the actual cost to the veteran or (wife or widow] spouse or surviving spouse, whichever is the lesser. Such allowance shall be paid quarterly on a pro rata basis for the lessons completed by the veteran or (wife or widow] spouse or surviving spouse, and serviced by the institution. (2) The period of entitlement of any veteran or (wife or widow] spouse or surviving spouse, who is pursuing any program of education exclusively by correspondence shall be charged with one month for each ($270] $~9~ which is paid to the veteran or (wife or widow] spouse or surviving spo~use as an educational assistance allowance for such course. (b) The enrollment agreement shall fully disclose the obligation of both the institution and the veteran or (wife or widow] spouse or 327 PAGENO="0808" 3428 surviving spouse and shall prominently display the/4~rovisions for affirinanee, termination, refunds, and the conditions under which pay- ment of the allowance is made by the Administrator to the veteran or (wife or widow] spouse or surviving spouse. A copy of the enrollment agreement shall be furnished to each such veteran or (wife or widow] spouse or survvving spouse at the time such veteran or (wife or widow] spouse or surviving spouse signs such agreement. No such agreement shall be effective unless such veteran or (wife or widow] spouse or surviving spouse shall, after the expiration of ten days after the enroll- ment agreement is signed, have signed and submitted to the Adminis- trator a written statement, with a signed copy to the institution, specifically affirming the enrollment agreement. In the event the veteran or (wife or widow] spouse or surviving spouse at any time notifies the institution of (his] sush veteran's or spouse's intention not to affirm the agreement in accordance with the preceding sentence, the institution, without imposing any penalty or charging any fee shall promptly make a full refund of all amounts paid. (c) the event a veteran or (wife or widow] spouse or surviving spouse elects to terminate Ehis~ such veteran's or spouse's enroll- ment under an affirmed enrollment agreement, the institution (other than one subject to the provisions of section 1776 of this title) may charge the veteran or (wife or widow] spouse or surviving spouse a registration or similar fee not in excess of 10 per centum of the tuition for the course, or $50, whichever is less. Where the veteran or (wife or widow~ spouse or surviving spouse elects to terminate the agreement after completion of one or more but less than 25 per centum of the total number of lessons comprising the course, the institution may retain such registration or similar fee plus 25 per centum of the tuition for the course. Where the veteran or Ewife or widow] spouse or surviving spouse elects to terminate the agreement after completion of 25 per centum but less than 50 per centurn of the lessons comprising the course, the institution may retain the full registration or similar fee plus 50 per centum of the course tuition. If 50 per centum or more of the lessons are completed, no refund of tuition is required. § 1787. Apprenticeship or other on-job training (a) An eii~ibie veteran (as defined in section 1652 (a) (1~ of this title) or an eligible person (as defined in section 1701 (a) of this title) shall be paid a training assistance allowance as prescribed by subsec- tion (b) of this section while pursuing a full-time- (1) program of apprenticeship approved by a State approving agency as meeting the standards of apprenticeship published by the Secretary of Labor pursuant to section 50a of title 29, or (2) program of other on-job training approved under provi- sions of section 1777 of this title, subject to the conditions and limitations of chapters 34 and 35 with respect to educational assistance. (b) (1) The monthly training assistance allowance of an elh~ible iieteran pursuing a program described under subsection (a) shall be as follows: 328 PAGENO="0809" 3429 I Column I Column II Column III Column IV ColumnV No One Two More than two Periods of training dependents dependent dependents dependents The amount in column IV, plus the follow- ing for each dependent in excess of two First 6 months $196 $220 $240 $10 Second 6 months 147 171 191 10 Third 6 months 98 122 142 10 Fourth and anysucceeding 6-month periods 49 73 93 10 Column I Column II Column III Column IV Column One Two More than tw Periods of training dependents dependent dependents dependent The amount in column IV, plus the follow- ing for each dependent in excess of two: FirstS months $212 $238 $260 $11 Second Cmonfhs 185 307 11 Third 6months 106 182 154 11 Fourth and any succeeding 6-month periods 58 79 101 11 (2) The monthly training assistance allowance of an eligible per- son pursuing a program described under subsection (a) shall be com- puted. at the rate prescribed in paragraph (1) of this subsection for an eligible veteran with no dependents pursuing such a course. (3) In any month in which an eligible veteran or person pursuing a program of apprenticeship or a program of other on-job training fails to complete one hundred and twenty hours of training in such month, the monthly training assistance allowance set forth in sub- section (b) (1) or (2) of this section, as applicable, shall be reduced proportionately in the proportion that the number of hours worked bears to one hundred and twenty hours rounded off to the nearest eight hours. (c) For the purpose of this chapter, the terms "program of appren- ticeship" and "program of other on-job training" shall have the same meaning as "program of education"; and the term "training assistance allowance" shall have the same meaning as "educational assistance allowance" as set forth in chapters 34 and 35 of this title. § 1788. Measurement of courses (a) For the purposes of this chapter and chapters 34 and 35 of this title- (1) an institutional trade or technical course offered on a clock- hour basis, not leading to a standard college degree, involving shop practice as an integral part thereof, shall be considered a full-time course when a minimum of thirty hours per week of attendance is required with nomore than two and one-half hours of rest periods per week allowed(;], but if such course is approved 329 PAGENO="0810" 3430 pursuant to section 1775 of this title, then 22 hours per week of attendance, with no niore than 2½ hours of rest period per week allowed and excluding supervised study, shall be considered full tinie; (2) an institutional course offered on a clock-hour basis, not leading to a standard college degree, in which theoretical or class- room instruction predominates shall be considered a full-time course when a minimum of twenty-five hours per week net of in- struction (which may include customary intervals not to exceed ten minutes between hours of instruction) is required(;], but if snch course is approved pursuant to section 1775 of th'is title, then 18 hours per week net of instruction (excluding supervised study), which may include cnstomary intervals not to exceed ten `n'binutes between hours of instruction, shall be considered full tinie; (3) an academic high school course requiring sixteen units for a full course shall be considered a full-time course whei~ (A) a minimum of four units. per year is required or (B) an individual is pursuing a program of education leading to an accredited high school diploma at a rate which, if continued, would result in receipt of such a diploma in four ordinary school years. For the. purpose of subclause (A) of this clause, a unit is defined to be not less than one hundred and twenty sixty-minute hours or their equivalent of study in any subject in one academic year; (4) an institutional undergraduate course offered by a college or university on a quarter- or semester-hour basis shall be con- sidered a full-time course when a minimum of fourteen semester hours or the equivalent thereof (including such hours for which no credit is granted but which are required to be taken to correct an educational deficiency and which the educational institution considers to be quarter or semester hours for other administrative purposes), for which credit is granted toward a standard col- lege degree, is required, except that where such college or uni- veisity certifies, upon the request of the Administrator, that (A) full-time tuition is charged to all undergraduate students carry- ing a minimum of less than fourteen such semester hours or the equivalent thereof, or (B) all undergraduate students carrying a minimum of less than fourteen such semester hours or the equivalent thereof, are considered to be pursuing a full-time course for other administrative purposes, then such an institu- tional undergraduate course offered by such college or university with such minimum number of such semester hours shall be con- sidered a full-time courses but in the event such minimum num- ber of semester hours is less than twelve semester hours or the equivalent thereof, then twelve semester hours or the equivalent thereof shall be considered a full-time course; (5) a program of anprenticeshin or a program of other on-job training shall he cousidered a full-time program when the eligible veteran or person is reiuired to work the number of hours con- stituting the stardard workweek of the training est.ahlisTiment, but a workweek of less than thirty hours shall not be considered to constitute full-time training unless a lesser number of hours 330 PAGENO="0811" 3431 has been established as the standard workweek for the particular establishment through bona flde collective bargaining; and (6) an institutional course offered as part of a program of education not leading to a standard college degree under section 1691 (a) (2) or 1696 (a) (2) of this title shall be. considered a full- time course on the basis of measurement criteria provided in clause (2), (3), or (4) as determined `by the educational institution. Notwithstanding the provisions of clause (1) or (2) of this subsec- tion, an educational institution offering courses not leading to a stand- ard college degree may measure such courses on a quarter- or semester- hour basis (with full time measured on the same basis as provided by clause (4) of this subsection) ; `but (A) the academic portions of such courses must require outside preparation and be measured on not less than one quarter or one semester hour for each fifty minutes net of~ instruction per week or quarter or semester; (B). the laboratory por- tions of such courses must be measured on not less than one quarter or one semester hour for each two hours of attendance per week per quar- ter or semester; and (C) the shop portions of such courses must be measured on not less than one quarter or one semester hour for each three hours of attendance per week per quarter or semester. In no event shall such course be considered a full-time course when less than twenty-two hours per week of attendance is required. (b) The Administrator shall define part-time training in the case of the types of courses referred to in subsection (a), and shall define full-time and part-time training in the case of all other types of courses pursued under this chapter or chapter 34 or 35 of this title. § 1789. Period of operation for approval (a) The Administrator shall not approve the enrollment of an eligible veteran or eligible person in any course offered by an educa- tional institution when such course has been in operation for less than two years. (b) Subsection (a) shall not apply to-. (1) any course to be pursued in a public or other tax-supported educational institution; (2) any course which is offered by an educational institution which has been in operation for more than two years, if such course is similar in character to the instruction previously given by such institution; (3) any course which has been offered by an institution for a period of more than two years, notwithstanding the institution has moved to another location within the same general locality, or has made a complete move with substantially the same faculty, curricula, and students, without change in ownership; (4) any course which is offered by a nonprofit educational in- stitution of college level and which is recognized for credit toward a standard college degree; or (5) any course offered by a proprietary nonprofit educa- tional institution which qualifies to carry out an approved pro- gram of education under the provisions of subchapter V or VI of chapter 34 of this title (including those courses offered at other than the institution's principal location) if the institution offering such course has been in operation for more than two years. 331 . PAGENO="0812" 3432 (c) Notwitheta'nding the provi~ione of subsection (b) (1), (s), (3), or (4) of thie section, the vieions of subsection (a) shall apply to any course offered by a branch or extension of- (1) a public or other tax-~siipported institution where the branch or extension is located outside of the area of the taxing jurisdic- tion providing support to such institution; or (2) a proprietary profit or proprietary nonprofit educatio~niil institution where the branch or extension is located beyond the normal commuting distance of such institution. § 1790. Overcharges by educational institutions; discontinuance of allowances; examination of records; false or mis- leading statements Overcharges by Educational Institutions (a) If the Administrator finds that an educational institution has- (1) charged or received from any eligible veteran or eligible person pursuing a program of education under this chapter or chapter 34 or 35 of this title any amount for any course in excess of the charges for tuition and fees which such institution requires similarly circumstanced nonveterans not receiving assistance under such chapters who are enrolled in the same course to pay, or (2) instituted, after the effective date of section 1780 of this title, a policy or practice with respect to the payment of tuition, fees~ or other charges in the case of eligible veterans and the Administrator finds that the effect of such policy or practice sub- stantially denies to veterans the benefits of the advance and pre- payment allowances under such section, (he] the Administrator may disapprove such educational institution for the enrollment of any eligible veteran or eligible person not already enrolled therein under this chapter or chapter 31, 34, or 35, of this title. Discontinuance of Allowances (b) The Administrator may discontinue the educational assistance allowance of any eligible veteran or eligible person if (he] the Administrator finds that the program of education or any course in which the veteran or person is enrolled fails to meet any of the require- ments of this chapter or chapter 34 or 35 of this title, or if (he] the Administrator finds that the educational institution offering such program or course has violated any provision of this chapter or chap- ter 34 or 35, or fails to meet any of the requirements of such chapters. Examination of Records (c) (The] Notwithstanding any other provision of law, the records and accounts of educational institutions pertaining to eligible veterans or eligible persons who received educational assistance under this chap- ter or chapter 31, 393, 34, or 35 of this title, as well as the recrods of other students which the Administrator detenirtines necessary to ascer- tain institutional compliance wtih the requirements of such chapters, shall be available for examination by duly authorized representatives of the Government. 332 PAGENO="0813" 3433 False or Misleading Statements (d) Whenever the Administrator finds that an educational institu- tion has willfully submitted a false or misleading claim, or that a veteran or person, with the complicity of an educational institution, has submitted such a claim, (he] the Athmini~trator shall make a complete report of the facts of the case to the appropriate State approving agency and, where deemed advisable, to the Attorney Gen- eral of the United States for appropriate action. § 1791. Change of program (a) Except as provided in subsections (b) and (c) of this section, each eligible veteran and eligible person may make not more than one change of program of education, but an eligible veteran or eligible person whose program has been interrupted or discontinued due to (his] the veteran's or person's own misconduct, (his] the veteran's or person's own neglect, or ~his~ the veteran's or person's own lack of application shall not be entitled to any such change. (b) The Administrator may approve one additional change (or an initial change in the case of a veteran or person not eligible to make a change under subsection (a)) in program if (he] the Adminis- trator finds that- (1) the program of education which the eligible veteran or eligible person proposes to pursue is suitable to (his] the veter- an's or person's aptitudes, interests, and abilities; and (2) in any instance where the eligible veteran or eligible person has interrupted, or failed to progress in, (his] the veteran's or person's program due to (his~ the veteran's or person's own mis- conduct, (his] the veteran's or person's own neglect, or (his] the veteran's or person's own lack of application, there exists a reasonable likelihood with respect to the program which the eligible veteran or eligible person proposes to pursue that there will not be a recurrence of such an interruption or failure to progress. (c) The Administrator may also approve additional changes in pro- gram if (he] the Administrator finds such changes are necessitated by circumstances beyond the control of the eligible veteran or eligible person. (d) As used in this section the term "change of program of educa- tion" shall not be deemed to include a change from the pursuit of one program to pursuit of another where the first program is prerequisite to, or generally required for, entrance into pursuit of the second. § 1792. Advisory committee There shall be an advisory committee formed by the Administrator which shall be composed of persons who are eminent in their respective fields of education, labor, and management, and of representatives of the various types of institutions and establishments furnishing voca- tional rehabilitation under chapter 31 of this title or education to eligible persons or veterans enrolled under chapter 34 or 35 of this title. The Committee shall also include veterans representative of World War II, the Korean conflict era, the post-Korean conflict era, and the Vietnam era. The Commissioner of Education and the Admin- istrator, Manpower Administration, Department of Labor, shall be 333 PAGENO="0814" 3434 ex officio members of the advisory committee. The Administrator shall 0% a regular basis advise and consult with the committee (from time to time] (which shall meet at least semiannually) with respect to the administration of this chapter and chapters 31, 34, and 35 of this title, and the committee may make such reports and recommendations as it deems desirable to the Administrator and to the Congress. (~ 1793. Institutions listed by Attorney General (The Administrator shall not approve the enrollment of, or payment of an educational assistance allowance to, any eligible veteran or eligi- ble person under this chapter or chapter 34 or 35 of this title in any course in an educational institution while it is listed by the Attorney General under section 12 of Executive Order 10450.] § 1793. Compliance surveys The Administrator shall conduct an annual compliance survey of each institution offering one Or more courses approved for the enroll- ment of eligible veterans or persons where at least 300 veterans or per- sons are enrolled under provisions of this title or where the course does not lead to a standard college degree. Such compliance survey shall assure that the institution and approved courses are in compliance with all applicable provisions of chapters 31, 34, 35, and 36 of this title. The Administrator shall assign at least one education compliance specialist to work on compliance surveys in any year for each 40 com- pliance surveys required to be made under this section. § 1794. Use of other Federal agencies In carrying out this] the Administrator's functions under this chapter or chapter 34 or 35 of this title, the Administrator may utilize the facilities and services of any other Federal department or agency. Any such utilization shall be pursuant to proper agreement with the Federal department or agency concerned; and payment to cover the cost thereof shall be made either in advance or by way of reimburse- rnent, as may be provided in such agreement. (~ 1795. Limitation on period of assistance under two or more programs (The aggregate period for which any person may receive assistance under two or more of the laws listed below- ((1)parts VII or VIII, Veterans Regulation numbered 1(a), as amended; ((2) title II of the Veterans' Readjustment Assistance Act of 1952; ((3) the War Orphans' Educational Assistance Act of 1956; ((4) Chapters 31, 34, 35, and 36 of this title, and the former chapter 33 may not exceed forty-eight months (or the part-time equivalent thereof), but this section shall not he deemed to limit the period for which assistance may be received under chapter 31 alone.~ § 1796. Limitation on certain advertising, sales, and enrollment practices (a) The Administrator shall not approve the enrollment of an eligi- ble veteran or eligible person in any course offered by an institution 334 PAGENO="0815" 3435 which utilizes advertising, sales, or enrollment practices of any type which are erroneous, deceptive, or misleading either by actual state- ment, omission, or intimation. (b) To ensure com~pliance with this section, any institution offering courses approved for the enrollment of eligible persons or veterans shall maintain a complete record of all advertising, sales, or enroll me'nt materials (and copies thereof) utilized by or on behalf of the in- stitution during the preceding 1~-m~onth period. Such record shall be available for inspection by the State approving agency or the Admin- istrator. Such materials shall include but are not limited to any direct mail pieces, brochures, printed literature used by sales persons, films, video tapes, a'nd audio tapes disseminated through broadcast media, material disseminated through print media, tear sheets, leaflets, hand- bills, fliers, and any sales or recruitment manuals used to instruct sales personnel, agents, or representatives of such institution. ((b)](c) The Administrator shall, pursuant to section 1794 of this title, enter into an agreement with the Federal Trade Commission to utilize, where appropriate, its services and facilities, consistent with its available resources, in carrying out investigations and making (his] the Administrator's determinations under subsection (a) of this section. Such agreement shall provide that cases arising under subsec- tion (a) of this section or any similar matters with respect to any of the requirements of this chapter or chapters 34 and 35 of this title shall be referred to the Federal Trade Commission which in its discre- tion will conduct an investigation and make preliminary findings. The findings and results of any such investigations shall be referred to the Administrator who shall take appropriate action in such cases within ninety days after such referral. [(c)] (d) Not later than sixty days after the end of each fiscal year, the Administrator shall report to Congress on the nature andi disposition of all cases arising under this section. Subchapter 1II-.Education Loans to Eligible Veterans and Eligible Persons § 1798. Eligibility for loans; amount and conditions of loans; interest rate on loans (a) Each eligible veteran and eligible person shall be entitled to a loan under this subchapter in an amount determined under, and sub- ject to the conditions specified in, subsection (b) (1) of this section if the veteran or person satisfies the requirements set forth in sub- section (c) of this section. (b) (1) Subject to paragraph (3) of this subsection, the amount of the loan to which an eligible veteran or eligible person shall be entitled under this subchapter for any academic year shall be equal to the amount needed by such veteran or person to pursue a program of education at the institution at which [he] the veteran or person is enrolled, as determined under paragraph (2) of this subsection. (2) (A) The amount needed by a veteran or person to pursue a program of education at an institution for any academic year shall be determined by subtracting (i) the total amount of financial resources (as defined in subparagraph (B) of this paragraph) avail- able to the veteran or person which may be reasonably expected to 335 PAGENO="0816" 3436 be expended by such veteran or person for educational purposes in any year from (ii) the actual cost of attendance (as defined in sub- paragraph (C) of this paragraph) at the institution in which such veteran or person is enrolled. (B) The term "total amount of financial resources" or any veteran or person for any year means the total of the following: (i) The annual adjusted effective income of the veteran or person less Federal income tax paid or payable by such veteran or person with respect to such income. (ii) The amount of cash assets of the veteran or person. (iii) The amount of financial assistance received by the vet- eran or person under the provisions of title IV of the Higher Education Act of 1965, as amended. (iv) Educational assistance received by the veteran or person under this title other than under this subchapter. (v) Financial acsistance received by the veteran or person under any scholarship or grant program other than those spec- ified in clauses (iii) and (iv). (C) The term "actual cost of attendance" means, subject to such regulations as the Administrator may provide, the actual per-student charges for tuition, fees, room and board (or expenses related to reasonable commuting), books, and an allowance for such other expenses as the Administrator determines by regulation to be reason- ably related to attendance at the institution at which the veteran or person is enrolled. (3) The aggregate of the amounts any veteran or person may borrow under this subchapter may not exceed ($270] $292 multiplied. by the number of months such veteran or person is entitled to receive educational assistance under section 1661 or subchapter II of chapter 35, respectively, of this title, but not in excess of ($6001 $2,000 in ~ one regular academic year. (c) An eligible veteran or person shall be entitled to a loan under this subchapter if such veteran or person- (1) is in attendance at an educational institution on at least ~ half-time basis and (A) is enrolled in a course leading to a stand- ard college degree, or (B) is enrolled in a course, the completion of which requires six months or longer, leading to an identified and predetermined professional or vocational objective; (2) has sought and is unable to obtain a loan, in the full amount needed by such veteran or person~ as determined under subsection (b) of this section, under a student loan program in- sured pursuant to the provisions of part B of title IV of the Higher Education Act of 1~35, as amended, or any successor authority and (3) enters into an agreement with the Administrator meeting the requirements of subsection (d) of this section. No loan shall be made under this subchapter to an eligible veteran or person pursuing a program of correspondence, flight, apprentice or other on-job, or PREP training. (d) Any agreement between the Administrator and a veteran or person under this subchapter- (1) shall include a note or other written obligation which pro- vides for repayment to the Administrator of the principal amount 336 PAGENO="0817" 3437 of, and payment of interest on, the loan in installments over a period beginning nine months after the date on which the bor- rower ceases to be. at least a half-time student and ending ten years and nine months after such date; (2) shall include provision for acceleration of repayment of all or any part of the loan, without penalty, at the option of the borrower; (3) shall provide that the loan shall bear interest, on the unpaid balance of the loan, at a rate prescribed by the Adminis- trator, (with the concurrence. of the Secretary of the Treasury. hut at a rate not less than a rate determined by the Secretary. taking into consideration the current average market yield on outstand- ing marketable obligations of the United States with remaining periods to maturity comparable to the maturity of loans made under this subchapter, except that no interest shall accrue prior. to the beginning date of repayment; and] at the time the loan is contracted for which rate sha7l be co~nparabie to the rate of inter- est charqed stud~nts at such time on loans insured by the Com- missioner of Education. Department of Health, Education. and Welfare, under part B of title IV of the Hiqher Education Act of 1965, but in no event shall the rate so prescribed by the Administra- tor exceed the rate charqed students on such insured loans, and shall provide that no interest shall accrue prior to the beginning date of repayment; and (4) shall provide that the loan, shall be made without security and without endorsement. (e) (1) Except as provided in paragraph (2) of this subsection, whenever the Administrator determines that a default has occurred on ~ny loan made under this subchapter, (he] the Administrator shall declare an overpayment, and such overpayment shall be recovered from the veteran or person concerned in the same manner a~ any other debt due the United States. (2) If a veteran or person who has received a loan under this section dies or becomes permanently and totally disabled, then `the Adminis- trator shall discharge the veteran's or person's liability on such loan by repaying the amount owed on such loan. (3) The Administrator shall submit to the Committees on Veterans' Affairs of the Senate and the House of Representatives, not later than one year after the date of enactment of the' Vietnam Era Veterans' Readjustment Assistance Act of 1974 and annually thereafter, a sep- arate report specifying the default experience and default rate at each educational institution along with a comparison of the collective de- fault experience and default rate at all such institutions. § 1799. Revolving fund; insurance (a) There is hereby established in the Treasury of the United States a revolving fund to be known as the "Veterans' Administration Edu- cation Loan Fund" (hereinafter in this section referred to as the "Fund"). (b) The Fund shall be available to the Administrator, without fiscal year limitation, for the making of loans under this subchapter. (c) There shall be deposited in the Fund (1) by transfer from cur- rent and future appropriations for readjustment benefits such amounts as may be necessary to establish and supplement the Fund in order 337 78-226 0 - 77 - 52 (Pt.4) PAGENO="0818" 3438 to meet the requirements of the Fund, and (2) all collections of fees and principal and interest (including overpayments declared under section 1798 (e) of this title) on loans made under this subchapter. (d) The Administrator shall determine annually whether there has developed in the Fund a surplus which, in (his~ the Admini,~strator's judgment, is more than necessary to meet the needs of the Fund, and such surplus, if any, shall be deemed to have been appropriated for readjustment benefits. (e) A fee shall be collected from each veteran or person obtaining a loan made imder this subchapter for the purpose of insuring against defaults on loans made under this subchapter; and no loan shall be made under this subchapter until the fee payable with respect to such loan has been collected and remitted to the Administrator. The amount of the fee shall he established from time to time by the Administrator, but shall in no event exceed 3 per centum of the total loan amount. The amount of the fee may be included in the loan to the veteran or person and paid from the proceeds thereof. * * * * * * * CHAPTER 41-JOB COUNSELING, TRAINING, AND PLACE- MENT SERVICE FOR VETERANS Sec. 2001. Definitions. 2002. Purpose. 2002A. T7eterans' Employment Service; Assi8tant Secretary of Labor for Vet- crans' Employment. 2003. Assignment of veterans' employment representative. 2004. Employees of local offices. 200~. Cooperation of Federal agencies. 2006. Estimate of funds for administration; authorization of appropriations. 2007. Administrative controls; annual report. 2008. Cooperation and coordination with the Veterans' Administration. * * * § 2002. Purpose The Congress declares as its inteht and purpose that there shall be an effective (1) job and job training counseling service program, (2) employment placement service program, and (3) job training place- ment service program for eligible veterans and eligible persons and that, to this end policies shaH be promulgated and administered by an Assistant Secretary of Labor for Veterans' Employment through a Veterans Employment Service within the Department of Labor, so as to provide such veterans and persons the maximum of employment and training opportunities through existing programs, coordination and merger of programs and implementation of new programs. ~ 2002A. Veterans' Employment Service; Assistant Secretary of Labor for Veterans' Employment There `is established within the Department of Labor a separate agency to be known as the TTeterans' Employment Service. Such agency shall be headed by an Assistant Secretary of Labor for Veterans' Em- pio?Iment who shall be responsible, subject to the supervision and con- trol of the Secretary of Labor, for carrying out the policies and purposes of this chapter, chapter 42, and chapter 4~ of this title and 338 PAGENO="0819" for policy formulation and athmini~trative implementation for all De- partment of Labor employment, unemployment, and manpower pro- grams to the extent they affect veteran~s. § 2003. Assignment of veterans' employment representative The Secretary of Labor shall assign to each State a representative of the Veterans' Employment Service to serve as the veterans' employ- ment representative, and shall further assign to each State one assist- ant veterans' employment representative per each 250,000 veterans and eligible persons of the State veterans population, and such addi- tional assistant veterans' employment representatives as ~he~ the Secretary shall determine, based on the data collected pursuant to sec- tion 2007 of this title, to be necessary to assist the veterans' employ- ment representative to carry out effectively in that State the purposes of this chapter. Each veterans' employment representative and assist- ant veterans' employment representative shall be an eligible veteran who at the time of appointment shall have been a bona fide resident of the State for at least two years and who shall be appointed in accord- ance with the provisions of title 5, United States Code, governing appointments in the competitive service, and shall be paid in accord- ance with the provisions of chapter 51 of subchapter III of chapter 53 of such title, relating to classification and general schedule pay rates. Each such veterans' employment representative and assistant veterans' employment representative shall be attached to the staff of the public employment service in the State to which they have been assigned. They shall be administratively responsible to the Secretary of Labor for the execution of the Secretary's veterans' and eligible persons' counseling and placement policies through the public employ- ment service and in cooperation with manpower and training pro- grams administered by the Secretary or by prime spow~ors under the Comprehen~sive Employment and Training Act in the State. In coop- eration with the public employment service staff and the staffs of each such other program in the State, the veterans' employment representa- tive and rhis] such representative's assistants shall- (1) be functionally responsible for the supervision of the regis- tration of eligible veterans and eligible persons in local employ- ment offices for suitable types of employment and training and for counseling and placement of eligible veterans and eligible persons in employment and job training programs; (2) engage in job development and job advancement activities for eligible veterans and eligible persons, including maximum coordination with appropriate officials of the Veteran's Admin- istration in that agency's carrying out of its responsibilities under subchapter IV of chapter 3 of this title and in the conduct of job fairs, job marts, and other special programs to match eligible veterans and eligible persons with appropriate job and job train- ing opportunities; (3) assist in securing and maintaining current information as to the various types of available employment and training oppor- tunities, including maximum use of electronic data processing and telecommunications systems and the matching of an eligible veteran's or an eligible person's particular qualifications with an 339 PAGENO="0820" 3440 available job or on-job training or apprenticeship opportunity which is commensurate with those qualifications; (4) promote the interest of employers and labor unions in employing eligible veterans and eligible persons and in conduct- ing on-job training and apprenticeship programs for such vet- erans and persons; (5) maintain regular contact with employers, labor unions, training programs and veterans' organizations with a view to keeping them advised of eligible veterans and eligible persons available for employment and training and to keeping eligible veterans and eligible persons advised of opportunities for em- ployment and training; (and] (6) promote the participation of veterans in Corn prehensive Employment and Training Act programs and monitor the im- plementation and operation of Comprehensive Employment and Training Act programs to assure that eligible veterans receive special consideration w/i en required; and ((6)] (7) assist in every possible way in improving working conditions and the advancement of employment of eligible vet- erans and eligible persons. § 2004. Employees of local offices Except as may be determined by the Secretary of Labor based on a demonstrated lack of need for such services, there shall be assigned by the administrative head of the employment service in each State one or more employees, preferably eligible veterans or eligible persons, on the staffs of local employment service offices, whose services shall be fully devoted to discharging the duties prescribed for the veterans' employment representative and (his] such representative's assistants. § 2005. Cooperation of Federal agencies All Federal agencies shall furnish the Secretary of Labor such rec- ords, statistics, or information as [he] the Secretary may deem neces- sary or appropriate in administering the provisions of this chapter, and shall otherwise cooperate with the Secretary in providing continu- ous employment and training opportunities for eligible veterans and eligible persons. § 2006. Estimate of funds for administration; authorization of appropriations (a) The Secretary of Labor shall estimate the funds necessary for the proper and efficient administration of this chapter. Such estimated sums shall include the annual amounts necessary ~or salaries, rents, printing and binding, travel, and communications. Sums thus esti- mated shall be included as a special item in the annual budget for the Department of Labor. Estimated funds necessary for proper counseling, placement, and training services to eligible veterans and eligible persons provided by the various State public employment service agencies shall each be separately identified in the budgets of those agencies as approved by the Department of Labor. (b) There are authorized to he appropriated such sums as may be necessary for the proper and efficient administration of this chapter. (c) In the event that the regular appropriations Act making ap- propriations for administrative expenses for the Department of Labor with respect to any fiscal year does not specify an amount for the 340 PAGENO="0821" 3441 purposes specified in subsection (b) of this section for that fiscal year, then of the amounts appropriated in such Act there shall be avail- able only for the purposes specified in subse.ction (b) of this section ~.uch amount as was set forth in the budget estimate submitted pur- suant to subsection (a) of this section. (d) Any funds made available pursuant to subsections (b) and (c) of this section shall not be available for any purpose other than those specified in such subsections, except with the approval of the Secretary of Labor based on a demonstrated lack of need for such funds for such purposes. § 2007. Administrative controls; annual report (a) The Secretary of Labor shall establish administrative controls for the following purposes: (1) To insure that each eligible veteran, especially those veterans who have been recently discharged or released from active duty, and each eligible person who requests assistance under this chapter shall promptly be placed in a satisfactory job or job training opportunity or receive some other specific form of assistance designed to enhance (his] such veteran's and eligible person's employment prospects sub- stantially, such as individual job development or employment counsel- ing services. (2) To determine whether or not the employment service agencies in each State have committed the necessary staff to insure that the provisions of this chapter are carried out; and to arrange for neces- sary corrective action where staff resources have been determined by the Secretary of Labor to be inadequate. (b) The Secretary of Labor shall establish definitive performance standards for determining compliance by the State public employment service agencies with the provisions of this chapter and chapter 42 of this title. A full report as to the extent and reasons for any noncompli- ance by any such State agency during any fiscal year, together with the agency's plan for corrective action during the succeeding year, shall be included in the annual report of the Secretary of Labor required by subsection (c) of this section. (c) The Secretary of Labor shall report annually to the Congress on the success of the Department of Labor and its affiliated State employment service agencies in carrying out the provisions of this chapter. The report shall include, by State. the number of recently discharged or released eligible veterans, veterans with service-con- nected disabilities, other eligible veterans, and eligible persons who requested assistance through the public employment service and, of these, the number placed in suitable employment or job training oppor- tunities or who were otherwise assisted, with separate reference to occupational training and public service employment under appro- priate Federal law. The report shall also include any determination by the Secretary under section 2001, (or] 2006, or ~OO7(a) of this title and a statement of the reasons for such determination. § 2008. Cooperation and coordination with the Veterans' Admin- istration In carrying out (his] the Secretary's responsibilities under this chapter, the Secretary of Labor shall from time to time consult with the Administrator and keep (him] the Administrator fully advised of 341 PAGENO="0822" 3442 activities carried out and aH data gathered pursuant to this chapter to insure. maximum cooperation and coordination between the Depart- ment of Labor and the Veterans' Administration. CHAPTER 42-EMPLOYMENT AND TRAINING OF DISABLED AND VIETNAM ERA VETERANS * * * * * * § 2011. Definitions As used in this chapter- (1) The term "disabled veteran" means a person entitled to dis- ability compensation under laws administered by the Veterans' Ad- ministration for a disability rated at 30 per centum or more, or a person whose discharge or release from active duty was for a disability incurred or aggravated in line of duty. (2) The term "veteran of the Vietnam era" means a person (A) who (1) served on active duty for a period of more than 180 days, any part of which occurred during the Vietnam era, and was dis- charged or released therefrom with other than a dishonorable dis- charge, or (ii) was discharged or released from active duty for a service-connected disability if any part of such active duty was per- formed during the Vietnam era, and (B) who was so discharged or released within the 48 months preceding (his] the person's application for employment covered under this chapter. (3) The term "department and agency" means any department or agency of the Federal Government or any federally owned corpora- tion. § 2012. Veterans' employment emphasis under Federal contracts (a) Any contract in the amount of $10,000 or more entered into by any department or agency for the procurement of personal property and non-personal services (including construction) for the United States, shall contain a provision requiring that the party contracting with the United States shall take affirmative action to employ and ad- vance in employment qualified disabled veterans and veterans of the Vietnam era. The provisions of this section shall apply to any sub- contract entered into by a prime contractor in carrying out any con- tract for the procurement of personal property and non-personal services (including construction) for the Uiiited States. In addition to requiring affirma:tive action to employ such veterans under such con- tracts and subcontracts and in order to promote the implementation of such requirement, `the President shall impleine~t the provisions of this section by promulgating regulations within 60 days after the date of enactment of this section, which regulations shall require that (1) each such contractor undertake in su~h coiitrac:t to list immediately with the appropriate local employment service office all of its suitable employment openings, and (2) each such local office shall give such veterans priority in referral to such employment openings. (b) If any disabled veteran or veteran of the Vietnam era believes any contractor has failed or refuses to comply with the provisions of rhisl the contractor's contract with the United States, reiating to the employment of veterans, such veteran may file a complaint with the Veterans' Employment Service of the Department of Labor. Such 342 PAGENO="0823" 3443 complaint shall be promptly referred to the Secretary who shall promptly investigate such complaint and shall take such action there- on as the facts and circumstances warrant consistent with the terms of such contract and the laws and regulations applicable thereto. (c) The Secretary shall include as part of the anmua.l report re- quired by section 2007(c) of this title the number of complaints flied pursuant to subsection (b) of this section, the actions taken thereon and the resolutions thereof. Sveh report shall also include the number of contractors list~ing suitable employment openings, the nature, types, and number of positions listed and the number of veterans receiving priority pursuant to subsection (a) (2) of this section. * * * * * Chapter 43-.Veterans' Reemployment Rights * * * * * * * § 2021. Right to reemployment of inducted persons; benefits protected (a) In the case of any person who is inducted into the Armed Forces of the United States under the Military Selective Service Act (or under any prior or subsequent corresponding law) for training and service and who leaves a position (other than a temporary posi- tion) in the employ of any employer in order to perform such train- ing and service, and (1) receives a certificate described in section 9(a) of the Military Selective Service Act (relating to the satisfactory completion of military service), and (2) makes application for reem- ployment within ninety days after such person is relieved from such training and service or from hospitalization continuing after dis- charge for a period of not more than one year- (A) if such position was in the employ of the United States Government, its territories, or possessions, or political subdivi- sions thereof, or the District of Columbia, such person shall- (i) if still qualified to perform the duties of such posi- tion, be. restored to such position or to a position of like seniority, status, and pay; or (ii) if not qualified to perform the duties of such posi- tion, by reason of disability sustained during such service, but qualified to perform the duties of any other position in the employ of the employer, be offered employment and, if such person so requests, be employed in such other posit~ion the duties of which such person is qualified to perform as will provide such person like seniority, status, and pay, or the nearest approximation thereof consistent with the cir- cumstanc&' in such person's case; (B) if such position was in the employ of a State, or political subdivision thereof, or a private employer, such person shall- (1) if still qualified to perform the duties of such posi- tion, be restored by such employer or [his~ the employer's successor in interest to such position or to a position of like seniority, status, and pay; or (ii) if not qualified to perform the duties of such posi- tion, by reason of disability sustained during such service, 343 PAGENO="0824" 3444 but qualified to perform the duties of any other position in the employ of such employer or (his] the employer's suc- cessor in interest, be offered employment and, if such person so requests, be employed by such employer or (his] the employer's successor in interest in such other position the duties of which such person is qualified to perform as will provide such person like seniority, status, and pay, or the nearest approximation thereof consistent with the circum- stances in such person's case, unless the employer's circumstances have so changed as to make it impossible or unreasonable to do so. Nothing in this chapter shall excuse noncompliance with any statute or ordinance of a state or political subdivision thereof establishing greater or addi- tional rights or protections than the rights and protections estab- lished pursuant to this chapter. (b) (1) Any person who is restored to or employed in a position in accordance with the provisions of clause (A) or (B) of subsection (a) of this section shall be considered as having been on furlough or leave of absence during such person's period of training and service in the Armed Forces, shall be so restored or reemployed without loss of seniority, shall be entitled to participate in insurance or other bene- fits offered by the employer pursuant to established rules and practices relating to employees on furlough or leave of absence in effect with the employer at the time such person was inducted into such forces, and shall not be discharged from such position without cause within one year after such restoration or reemployment. (2) It is hereby declared to be the sense of the Congress that any person who is restored to or employed in a position in accordance with the provisions of clause (A) or (B) of subsection (a) of this section should be so restored or reempioyed in such manner as to give suci i)erson such status in (his] the person's employment as (he] the per- son would have enjoyed if such person had continued in such employ- rnent continuously from the time of such person's entering the Armed Forces until the time of such person's restoration to such employment, or reemployment. (3) Any person who holds a position described in clause (A) or (B) of subsection (a) of this section shall not be denied retention in employment or any promotion or other incident or advantage of employment because of any obligation as a member of a Reserve com- ponent of the Armed Forces. (c) The rights granted by subsection (a) and (b) of this section to persons who left the employ of a State or political subdivision thereof and were inducted into the Armed Forces shall not diminish any rights such persons may have pursuant to any statute or ordinance of such State or political subdivision establishing greater or additional rights or protections. * * * * * * § 2024. Rights of persons who enlist or are called to active duty; Reserves (a) Any person who, after entering the employment on the basis of which such person claims restoration or reemployment, enlists in the Armed Forces of the United States (other than in a Reserve compo- 344 PAGENO="0825" 3445 nent) shall be entitled upon release from service under honorable con- ditions to all of the reemployment rights and other benefits provided for by this section in the case of persons inducted under the provisions of the Military Selective Service Act (or prior or subsequent legisla- tion providing for the involuntary induction of persons into the Armed Forces), if the total of such person's service performed between June 24, 191:8, and August 1, 1961, did not exceed four years, and the total of any service, additional or otherwise, performed by such person after August 1, 1961, does not exceed five years, and if the service in excess of four years after August 1, 1961, is at the request and for the convenience of the Federal Government (plus in each case any period of additional service imposed pursuant to law). (b) (1) Any person who, after entering the employment on the basis of which such person claims restoration or reemployment, enters upon active duty (other than for the purpose of determining physical fit- ness and other than for training), whether or not voluntarily, in the Armed Forces of the United States or the Public Health Service in re- sponse to an order or call to active duty shall, upon such person's relief from active duty under honorable conditions, be entitled to all of the reemployment rights and benefits provided for by this chapter in the case of persons inducted under the provisions of the Military Selective Service Act (or prior or subsequent legislation providing for the involuntary induction of persons into the Armed Forces), if the total of such active duty performed between June 24, 1948, -and August 1, 1961, did not exceed four years, and the total of any such active duty, additional or otherwise, performed after August 1, 1961, does not exceed four years (plus in each case any additional period in which such person was unable to obtain orders relieving such person from active duty). (2) Any member of a Reserve component of the Armed Forces of the United States who voluntarily or involuntarily enters upon active duty (other than for the purpose of determining physical fitness and other than for training) or whose active duty is voluntarily or invol- untarily extended during a period when the President is authorized to order units of the Ready Reserve or members of a Reserve component to active duty shall have the service limitation governing eligibility for reemployment rights under subsection (b) (1) of -this section extended by such member's period of such active duty, but not to exceed that period of active duty to which the President is authorized to order units of the Ready Reserve or members of a Reserve component. With respect to a member who voluntarily enters upon active duty or whose active duty is voluntarily extended, the provisions of this subsection shall apply only -when such additional active duty is at -the request and for the convenience of the Federal Government. - (c) Any member of a Reserve component of the Armed Forces of - the United States who is ordered to an initial period of active duty for training of not Tess -than three consecutive months shall, upon applica- tion for reemoloyment within thirty-one days after (1) such rnem- ber's release from such active duty for training after satisfactory service, or (2~ -such members' discharge from hospitalization incident to such active duty for training, or one year after such member's sched- uled release from such training, whichever is earlier, be entitled to all reemnlovment rights and benefits provided by this chapter for per- sons inducted under the provisions of the Military Selective Service 345 PAGENO="0826" 3446 Act (or prior or subsequent legislation providing for the involuntary induction of persons into the Armed Forces), except that (A) any person restored to or employed in a position in accordance with the provisions of this subsection shall not be discharged from such posi- tion without cause within six months after that restoration, and (B) no reemployment rights granted by this subsection shall entitle any person to retention, preference, or displacement rights over any vet- eran with a superior claini under those provisions of title 5 relating to veterans and other preference eligibles. (d) Any employee not covered by subsection (c) of this section who holds a position described in clause (A) or (B) of section 2021(a) shall upon request be granted a leave of absence by such person's employer for the period required to perform active duty for training or inactive duty training in the Armed Forces of the United States. Upon such employee's release from a period of such active duty for training or inactive duty training, or upon such employee's discharge from hospitalization incident to that training, such employee shall be permitted to return to such employee's position with such seniority, status, pay, and vacation as such employee would have had if such employee had not been absent for such purposes. Such employee shall report for work at the beginning of the next regularly scheduled working period after expiration of the last calendar day necessary to travel from the place of training to the place of employment follow- ing such employee's release, or within a reasonable time thereafter if delayed return is due to factors beyond the employee's control. Failure to report for work at such next regularly scheduled working period shall make the employee subject to the conduct rules of the employer pertaining to explanations and discipline with respect to absence from scheduled work. If such an employee is hospitalized incident to active duty for training or inactive duty training, such employee shall be required to report for work at the beginning of the next regularly scheduled work period after expiration of the time necessary to travel from the place of discharge from hospitalization to the place of employment, or' within a reasonable time thereafter if delayed return is due to factors beyond the employee's control, or within one year after such employee's release from active duty for training or inactive duty training, whichever is earlier. If an employee covered by this subsection is not qualified to perform the duties of such employee's position by reason of disability sustained during active duty for training or inactive duty training, but is qualified to perform the duties of any other position in the employ of the employer or (his~ s~uc1i employer's successor in interest, such employee shall be offered employment and, if such person so requests, be employed by that employer or this] such employer's successor in interest in such other position the duties of which such employee is qualified to per- form as will provide such employee like seniority, status, and pay, or the nearest approximation thereof consistent with the circumstances in such employee's case. (e) Any employee not covered by subsection (c) of this section who holds a position described in clause (A) or (B) of section 2021(a) shall be considered as having been on leave of absence during the period required to report for the purpose of being inducted into, enter- ing, or determining, by a preinduction or other examination, physical 346 PAGENO="0827" 3447 fitness to enter the Armed Forces. TJpon such employee's rejection, upon completion of such employee's preinduction or other examination, or upon such employee's discharge from hospitalization incident to such rejection or examination, such employee shall be permitted to re- turn to such employee's position in accordance with the provisions of subsection (d) of this section. (f) For the purposes of subsections (c) and (d) of this section, full-time training or other full-time duty performed by a member of the National Guard under section 316, 503, 504, or 505 of title 32, is considered active duty for training; and for the purpose of subsection (d) of this section, inactive duty training performed by that member under section 502 of title 32 or section 206, 301, 309, 402, or `1002 of title 37, is considered inactive duty training. * * * S * * * * PART IV-GENERAL ADMINISTRATIVE S PROVISIONS S * * * S * * * * CHAPTER 51-APPLICATIONS, EFFECTIVE DATES,. AND S PAYMENTS * * * * * * * CHAPTER 53-SPECIAL PROVISIONS RELATING TO BENEFITS * * * * * * * § 3101. Nonassignability and exempt status of benefits (a) Payments of benefits due or to become due under any law administered by the Veterans' Administration shall not be assign- able e::cept to the extent specifically authorized by law, and such payments made to, or on accoimt of, a beneficiary shall be exempt from taxation, shall be exempt from the claim of creditors, and shall not be liable to attachment, levy or seizure by or under any le~a1 or equitable process whatever, either before or after receipt by the beneficiary. The preceding sentence shall not apply to claims of the United States arising under such laws nor shall the exemp- tion therein contained as to taxation extend to any property purchased in part or wholly out of such payments. The provisions of this sec- tion shall no~ be construed to prohibit the assignment of insurance otherwise authorized under chapter 19 of this title, or of servicemen's indemnity. For the purposes of this subsection, in any case where a va?/ee of an edmujationa7 assistance allowance has desiqnated the address of an attorney-in-fact as the payee's address for the purpose of receivin.q his or 1~er here fit check amid has also eceecuted a power of attorney givinq the attorney-in-fact authority to negotiate such benefit check, such action shall be deemed to be an assignment and is prohibited. 347 PAGENO="0828" 3448 (b) This section shall prohibit the collection by setoff or other- wise out of any benefits payable pursuant to any law administered by the Veterans' Administration and relating to veterans, their estates, or their dependents, of any claim of the United States or any agency thereof against (1) any person other than the indebted bene- ficiary or his estate; or (2) any beneficiary or his estate except amounts due the United States by such beneficiary or his estate by reason of overpayments or illegal payments made under such laws to such beneficiary or his estate or to his dependents as such. If the benefits refe.rred to in the preceding sentence are insurance payable by reason of yearly renewable term insurance, United States Govern- ment life insurance, or National Service Life Insurance issued by the United States, the exemption provided in this section shall not apply to indebtedness existing against the particular insurance contract upon the maturity of which the claim is based, whether such indebtedness is in the form of liens to secure unpaid premiums or loans, or interest on such premiums or loans, or indebtedness arising from overpay- ments of dividends, refunds, loans, or other insurance benefits. (c) Notwithstanding subsection (a) payments of benefits under laws administered by the Veterans' Administration shall not be exempt from levy under subchapter D of chapter 64 of the Internal Revenue Code of 1954 (relating to seizure of property for collection of taxes). * * * * * * * 348 PAGENO="0829" APPENDIX B Calendar NO. 1179 94~'ii CONGRESS 2o SESSION S 969 IN THE SENATE OF THE UNITED STATES SEPTEMBER 17, 1976 Ordered to lie on the table and to be printed AMENDMENTS Intended to be proposed by Mr. GARY HART to S. 969, a bill to amend chapter 34 of title 38, United States Code, to extend the basic educational assistance eligibility for veterans under chapter 34 and for certain dependents under chapter 35 from thirty-six to forty-five months, viz: At the end of the bill add the following: 2 "SEC. 3. Section 211 (a) of title 38, United States Code, 3 is amended by striking out all after "shall be" and inserting 4 in lieu thereof the following: "subject to judicial review as 5 provided in chapte.r 7 of title 5.". 6 "SEc. 4. Section 3404 (c) of title 38, United States 7 Code, is hereby repealed.". Amdt. No. 2318 (3449) PAGENO="0830" 3450 Amend the title so as to read: "A bill to amend chapter 34 of title 38, United States Code, to extend the basic educa- tional assistance eligibility for veterans under chapter 34 and for certain dependents under chapter 35 from thirty-six to forty-five months, and to provide for judicial review of administrative determinations made by the Administrator of Veterans' Affairs, aiid for other purposes. PAGENO="0831" 3451 Calendar No. 1179 94TH CONGRESS 2D SESSION S 969 IN THE SENATE OF THE UNITED STATES SEPTEMBER 21, 1976 Ordered to lie on the table and to be printed AMENDMENT Intended to be proposed by Mr. DTJIIKIN to 5. 969, a. bill to amend chapter 34 of title 38, United States Code, to extend the basic educational assistance eligibility for veterans under chapter 34 and for certain dependents under chapter 35 from thirty-six to forty-five months, viz: Strike title IV and insert in lieu thereof the following as a substitute: 1 TITLE IV-TERMINATION OF CHAPTER 34 2 BENEFITS 3 SEC. 401. Section 1652 of title 38, United States Code, 4 is amended- 5 (1) by amending paragraph (1) of subsection (a) 6 to read as follows: 7 "(1) The term `eligible veteran' means any veteran 8 who- 9 "(A) served on active duty for a period of more Amdt. No. 2333 PAGENO="0832" 3452 1 than 180 days, any part of which occurred after Janu- 2 ary 31; 1955, afld before January 1, 1977, and was dis- charged or released therefrom under conditions other 4 than dishonorable; or 5 "(B) contracted with the Armed Forces and was 6 enlisted in or assigned to a reserve component prior to 7 January 1, 1977, and as a result of such enlistment or 8 assignment served on active duty for a period of more 9 than 180 days, any part of which commenced within 12 10 months after January 1, 1977, and was discharged or ii released from such active duty under conditions other 12 than dishonorable; or 13 "(C) was discharged or released from active duty, 14 any pai~t of which was performed after January 31, 15 195~, and before January 1, 1977, orfollowing entrance 16 into active service from an enlistment or assignment 17 referred to in clause (B) of this paragraph, because of a 18 servi~e-connected disability."; and 19 (2) by inserting in subsection (a) (2) "or (B)" 20 after "paragraph (1) (A) ". 21 SEc. 402. Section 1661 (a) of title 38, lJnited States 22 Code, is amended by adding at the end thereof a new sell- 23 tence as follows: "lii the case of any person serving on active 24 duty on December 31, 1976, or a person whose eligibility 25 is based on section 1652 (a) (1) (B) of this chapter, the PAGENO="0833" 3453 1 ending date for computing such person's entitlement shall 2 be the date of such person's first discharge or release from 3 active duty after December 31, 1976.". 4 SEC. 403. Section 1662 of title 38, United States Code, 5 is amended by adding at the end thereof a new subsection as 6 follows: 7 "TEIU\HNATION OF PROGRAM 8 "(e) In no event may educational assistance be afforded 9 any eligible veteran under this chapter or chapter 36 after 10 December 31, 1989.". 78-226 0 - 77 -53 (Pt.4) PAGENO="0834" 3454 Calendar No. 1179 94TH CONGRESS 2D SESSION 3 969 IN THE SENATE OF THE UNITED STATES SEPTEMBER 21, 1976 Ordered to lie on the table and to be printed AMENDMENT Intended to be proposed by Mr. DURKIN (for himself, Mr. CLARK, Mr. EAsTLAND, Mr. MATHIAS, Mr. HUGH SCOTT, and Mr. ALLEN) to S. 969, a bill to amend chapter 34 of, title 38, United States Code, to extend the basic educa- tional assistance eligibility for veterans under chapter 34 and for' certain dependents under chapter 35 from thirty.six to forty-five months, viz: At the appropriate place insert the following new section: 1 SEC. 214. (a) Section 1662 (a) of title 38, United 2 States Code, is amended by inserting "(1)" after "(a)" 3 and by adding at the end of such section a new paragraph 4 as follows: 5 "(2) Notwithstanding the provisions of paragraph 6 (1), any veteran shall be permitted to use any of such 7 veteran's unused educational entitlement under this chapter Amdt. No. 2334 PAGENO="0835" 3455 2 j~ tftcr~; the~cle1irnithi~g date otherwise applicable to such vet- 2 eran, as provided in paragraph ..( 1), if such veteran was 3 enrolled as a full-thne ~st~ident ~and pursuing an approved 4 course of education at the time of the expiration of such 5 veteran's eligibility, or if such veteran was a part-time ti student at the time of the e~piration ef such veteran's 7 eligibility and was receiving educational benefits, a loan, or 8 compensation under any program provided for in the 9 Omnibus Crime Control and Safe Streets Act of 1968. Not- 10 withstanding any other provision of this chapter or chapter 11 .36 of this title, any veteran whose delimiting period is ex- 12 tended under this paragraph- 13 "(i) may confinne to use any unused entitl~ment 14 under this chapter until such entitlement is exhausted, 15: until the expiration of three years, or until the veteran 16 . has completed the approved course. of education in 17 which the veteran was enrolled at the end of the delimit- 18 ing period referred to in paragraph (1); whichever 19 occurs first; 20' "(ii) must pursue a program of education on a full- 21 time basis unless such veteran is receiving `educational 22 benefits, `a loan or compensation under~ a program pro- 2~ " vided for in the Omnibus Crime Control and Safe Svreets 2.' ` ~ct of ~9~5; and . PAGENO="0836" 3456 3 1 "(111) shall be entitled to an educational assistance 2 allowance equal to the educational assistance allowance 3 authorized for eligible veterans whose delimiting period 4 has not expired or been extended by this paragraph.". 5 (b) The amendment made by subsection (a) of this 6 section shall become effective upon the date of enactment 7 of this Act, and apply to all veteralls released from active 8 duty after January 31, 1955. PAGENO="0837" 3457 Calendar No. 117.~9 94TH CONGRESS 2D SESSION S 969 IN THE SENATE OF THE UNITED STATES SEPTEMBER 21, 1976 Ordered to lie on the table and to be printed AMENDMENT Intended to 1)e proposed by Mr. DURKIN (for himself and Mr. TAFT, Mr. MATmAs, and Mr. Huon SCoTT) to S. 989, a bill to amend chapter 34 of title 38, United States Code to extend the basic educational assistance eligibility for veterans under chapter 34 and for certain dependents under chapter 35 from thirty-six to forty-five months, viz: At the appro- priate place insert the following new section: 1 SEC. 215. (a) Chapter 34 of title 38, United States 2 Code, is amended by inserting after section 1082 a new 3 section as follows: 4 "~ 1682A. Accelerated tuition assistance 5 "(a) Notwithstanding any other provision of this 6 chapter, or chapter 36 of this title, a veteran pursuing a 7 full-time program of education at an educational institution 8 approved by the Administrator may apply to tii~ Admin- Aindt. No. 2335 PAGENO="0838" 3458 9 1 istrator to have his monthly educational assistance allow- 2 ance accelerated and have his entitlement under this chapter. 3 changed proportionally. 4 . "(b) The Administrator shall approve the application 5 of any veteran for accelerated payment of educational assist- 6 ance allowance if he determines, on the basis of such applica- 7 tion, that such veteran's tuition and fees for the regular 8 academic year or comparable period of enrollment are in 9 excess of $750 and that the veteran will be able to attain the 10 veteran's predetermined and identified educational objective 11 within the veteran's entitlement period if payment is 12 accelerated. 13 "(c) In no event shall the total amount of educational 14 assistance allowance payable to the veteran under section 15 1682 (a) (1) of this title be increased in any regular 16 academic year or comparable period of enrollment- 17 "(1) by more than twice the amount the veteran 18 would otherwise be entitled to receive in such school 19 year or comparable period of enrollment under this 20 chapter, or 21 " (2) by more than the amount of the. veteran's 22 tuition and fees for a regular academic year or corn- 23 parable period of enrollment, plus the amount the vet- 24 eran would normally receive in educational assistance 25 allowance under this chapter during a regular academic PAGENO="0839" 3459 3 1 year or eumparable period of enrollment, whichever is 2 less. 3 "(d) The Administrator shall discontinue the ac- 4 celerated educational assistance to any veteran under this 5 ~ection if the Administrator finds that the program of in- 6 struction in which the veteran is enrolled at any time fails 7 to meet the requirements of subsections (b) and (c) of this 8 section.". 9 (b) The amenthnent made by subsection (a) of this 10 section shall become effective on January 1, 1977. PAGENO="0840" PAGENO="0841" APPENDIX C [From the `Congressional Record-Senate, October 1, 1976] VETERANS' EDUCATION ANI) EMPLOYMENT ASSISTANCE ACT OF 1976 Mr. ROBERT C. BYRD. Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of Calendar Order No. 1179. The PRESIDING OFFICE~. Without objection, the Senate will proceed to the con- sideration of S. .969, which the clerk will state by title. The legislative clerk read as follows: `A l)ill (S. 969) to amend chapter 34 of title 38, United States Code, to extend the basic educational assistance eligibility for veterans under chapter 34 and for certain dependents under chapter 35 from 36 to 45 months." * * * * * * * Mr. HARTKE. Mr. President, the Veterans' Education and Employment As- sistance Act of 1976 is intended to expand and to improve further the current GI bill I)rogram. The act represents the conunittee's continued oversight efforts of education and employment assistance programs. Previous legislation resulting from such oversight includes Public Law 91-219, Public Law 92-540 and the Viet- nani Era Veterans Readjustment Assistance Act of 1974 (Public Law 93-508). As reported, 8. 969 provides an 8-percent increase in the vocational rehabili- tation subsistence allowance paid to disabled veterans training under chapter 31. Similar 8-percent increases in the educational training assistance allowances are authorized for veterans training under chapter 34 and for survivors and de- pendents training under chapter 35. Maximum entitlement to educational bene- fits for all eligible veterans and dependents is extended from 36 to 45 months. The Veterans' Administration direct education loan program and special pro- grains for educatiomially disadvantaged veterans and servicemen are improved and expanded. Eligibility for current GI educational benefits are terminated for those entering the Armed Forces after December 31, 1976. A new chapter 32 contributory vesting educational assistance program known as the post-Vietnam- era veterans' readjustment assistant l)rogram is established for those entering the Armed Forces on or after January 1, 1977. Provisions are included which clarify, codify, and strengthen administrative provisions of the VA educational assistance program. tI'hese provisions are designed to prevent or reduce abuses, Finally, provisions are included which strengthen current employment assist- ance provisions for veterans. The act would elevate the Director of Veterans' Employment Service w-ithin the J)epartment of Labor to assistant secretary. S. 969, as amended, the Veterans' Education and Employment Assistance Act of 1976, contains seven titles whose provisions are more fully described here- after. Title 1-chapter 31, disabled veterans' vocation rehabilitation rate and pro- gram adjustments-of 5. 969, as amended: First, increases by 8 l)ercent the subsistence allowance paid disabled veterans pursuing a course of vocational rehabilitation under chapter 31 of title 38, United States Code; Second, eliminates the current termination date for use by seriously dis- abled veterans of chapter 31 benefits when it is determined that such veterans are still in need of vocational rehabilitation; and Third, permits chapter 31 trainees to be trained in Federal agency facilities on the same basis as trainees under the Rehabilitation Act of 1973, thus afford- ing disabled veterans increased opportunities for Federal employment. Title Il-veterans' education rate program adjustments-of 5~ 969, as amended: First, increases by 8 percent the educational assistance allowance paid eligible veterans pursuing a program of education-including farm cooperative, ele- mentary and secondary education and preparatory educational assistance- under chapter 34 of title 38, United States Cede; (3461) PAGENO="0842" 3462 Second, increases by 8 percent the individualized tutorial assistance allow- aiice authorized for eligible veterans with deficiencies in subjects required as part of an approved program of education; Third, extends the tutorial assistance program in certain cases to veterans enrolled in institutional or technical courses not leading to a standard college degree; Fourth, authorizes full entitlement for educational assistance benefits under chapter 34 for service of less than 18 months to any eligible veteran medically discharged because of a service-connected disability; Fifth, removes the current restriction to undergraduate use of the 9 months of additional benefit entitlement granted in 1974 plus allowing a maximum of 45 months of eligibility for an approved program of education--including graduate work; Sixth, extends the 10-year delimiting period for use of VA benefits for such periods of time that a veteran is prevented from completing his or her program of education because of a physical or mental disability not the result of the veterans misconduct; Seventh, codifies existing regulations which define the terms "institution of higher learning" and "standard college degree"; Eighth, directs the Administrator to conduct a study to determine the effec- tiveness of vocational objective courses approved for enrollment of veterans with particular emphasis as to whether there is full compliance with the provisions of section 1673 (a) (2) Ninth, codifies existing regulations which limit enrollment of veterans in any independent study program other than those leading to a standard college de- gree and provides that benefits for a course of study exclusively by independent study shall be computed on a less than halftime basis; Tenth, extends to all programs of education the requirement that no more than 85 percent of the students enrolled in certain approved courses be in receipt of VA benefits or other Federal grants; Eleventh, clarifies the definition of "unsatisfactory progress" to include those situations where a veteran is not progressing at a rate which will allow the graduate within the normal period of time for completion of studies-unless the Administrator finds that there are mitigating circumstances; Twelfth, amends the veteran-student services program to permit completion of a work-study agreement even if the veteran ceases to be a full-time student; and Thirteenth, requires the VA to make available comprehensive educational and vocational counseling to any eligil)le veteran who requests it. Title 111-Chapter 35, survivors' and dependents' educational assistance rate and program adjustments-of S. 969, as amended: First, increases by 8 percent the educational assistance allowance paid sur- vivors of veterans who died of service-connected causes, and dependents of seriously disabled veterans; Second, extends maximum entitlement to benefits from 36 to 45 months for all persons training under chapter 35; Third, liberalizes the period of eligibility for use by eligible children of edu- cational assistance benefits under chapter 35; Fourth, codifies existing regulations which define the terms "institution of higher learning" and "standard college degree"; Fifth, codifies existing regulations which limit enrollment of eligible persons in any "independent study program" other than those leading to a standard college degree and provides that benefits for a course of study which is exclu- sivelv by independent study shall be computed on a less than halftime basis; and Sixth, further defines "unsatisfactory progress" to include those situations where an eligible person is not progressing at a rate which will allow' the eligible person to graduate within the normal time for completion of the program as certified to the Veterans' Administration-unless the Administrator finds that there are mitigating circumstances. Title IV_Post-Vietnamfl Era Veterans' Readjustment Assistance Act-of S. 969, as amended: First, establishes Deceml)er 31, 1976, as the terminating date for establishing eligibility for veterans' education and training benefits under chapter 34 of title 38. TTnited States Code; PAGENO="0843" 3463 Second, establishes for those men and women entering the Armed Forces on or after January 1, 1917, a new chapter 32 educational matching assistance pro- gram as post-Vietnam-era veterans' readjustment assistance; and Third, provides that in the event involuntary induction under the Selective Service Act is reimposed by law that those entering military service after the effective date of such a change in the law shall be eligible for chapter 34 educa- tional benefits. Title V-chapter 36, Education Loan and Program Administration amend- ments-of S. 969, as amended: First, increases by 8 percent the monthly training assistance allowance paid to eligible veterans or persons pursuing a full program of apprenticeship or other on-job training and provides similar increases for those pursuing a pro- gram of education by correspondence; Second, increases from $600 to $2,000 the maximum annual VA direct educa- tion loan available for eligible veterans, survivors, and dependents; Third, amends the VA direct education loan program to provide that interest charges on such loans shall be comparable to, but shall not exceed those charged students under other federally insured educational loan programs; Fourth, provides that the school catalogs submitted by institutions to State approving agencies contain the school's progress requirements for graduation; Fifth, codifies existing regulations prohibiting payments for the auditing of courses and further directs that absent mitigating circumstances no payment will be authorized for any course for which the grade assigned is not used in computing the requirements for graduation; Sixth, permits continued VA payments for intervals between school terms and provides that when a veteran or eligible person transfers from one institution to another payments are permitted providing that in either event such periods do not exceed 30 days; Seventh, increases by 8 percent the allowance paid for administrative ex- lJeflses incurred by State approving agencies in supervising approved educa- tional institutions and further authorizes subcontracting by such State agencies; Eighth, codifies existing regulations which provide that the date of interrup- tion or termination in a program of education shall be the last date the veteran or eligible person pursued such course; Ninth, increases by $2 the reporting fee paid to institutions for each veteran or other eligible person enrolled therein; Tenth, reduces the required number of clock hours in certain vocational ob- jective courses necessary to qualify as a full-time course; Eleventh, extends the requirement of 2 years of operation to certain branches or extensions of institutions prior to VA approval for enrollment of veterans; Twelfth, provides the Administrator shall not approve the enrollment of any eligible veteran or person in any correspondence course leading to a vocational objective which is normally completed in less than 6 months; Thirteenth, strengthens section 1796 which directs the Administrator not to approve the enrollment of veterans in any course offered by an institution uti- lizing the erroneous, deceptive, or misleading sales or enrollment practices by requiring institutions to maintain complete records and copies of all advertising and sales materials utilized during the preceding 12-month period; Fourteenth, clarifies and strengthens provisions permitting VA inspection of student records to assure institutional compliance with the requirements of title 38 Fifteenth, strengthens and improves the education advisory committee to the Veterans' Administration; Sixteenth, repeals the current 48-month limitation for benefit entitlement to any person eligible and training under more than one VA educational assistance program; and - - Seventeenth, requires annual VA compliance surveys of Institutions which enroll eligible veterans. Title VT-veterans' employment assistance provisions-of S. 969, as arnended First provides that the Veterans' Employment Service within the Department of Labor shall be headed by an Assistant Secretary of Labor for Veterans' Em- ployment; and Second, expands and strengthens the administrative controls to assure that eligible veterans receive satisfactory employment assistance. Title VII-miscellaneous and effective date-of S. 969, as amended: PAGENO="0844" 3464 First, provides that, except as otherwise specified, all provisions shall become effective on October 1, 1976; and Second, clarifies and strengthens provisions prohibiting the assignment of VA benefits. In addition to the foregoing, there are a number of technical amendments to chapters 31, 34, 35, 41, 42, and 43 of title 38, United States Code, including the removal of unnecessary and unwarranted gender references. * * * * * * * Mr. HARTKE. Mr. President, the reported bill also contains an important section requiring the Veterans' Administration to conduct a thorough study of vocational objective programs, particularly to see if they are complying with the requirements of section 1673(a) (2) of title 38, United States Code, the SO called 50-percent employment requirement. I believe such ~ study is necessary and that administrati~. :i~anges may be required with respect to implementation of this rule to assure that the intent of statute is fully carried out. In this con- nection the General Accounting Office recently completed a preliminary exami- nation of the 50-percent rule and certain other provisions which were enacted as part of~ Public Law 93-508. I ask unanimous consent that this report by the General Accouiiting Office be inserted in the Record at this point. There being no objection it was ordered printed as follows: COMPTROLLER GENERAL OF THE UNITED STATES, Washington, D.C., September 17, 1076. Hon. VANCE HARTKE, Chairman, Committee on Veterans' Affairs, U.S. Senate DEAR MR. CHAIRMAN: In your April 24, 1975, letter you requested that we determine whether the Veterans Administration (VA), State approving agen- cies, `and participating schools were properly implementing certain lrovisions of the Vietnam Era Veterans' Readjustment Assistanet Act of 1974 (Public Law 93-508)-specifically the 50 percent employment rule, the 85 percent enrollment rule, and the course character and advertising provisions. We selected 13 schools for review-7 correspondence schools, 4 vocational/ technical schools, and 2 flight schools. As you requested, we chose (1) corre- spondence schools which were the subject of our previous review of certain provisions of the Vietnam Era Veterans' Readjustment Assistance Act of 1972, (Public Law 92-540),' (2) vocational/technical schools providing resident train- ing. and (3) flight training schools. We selected these schools also because they had a variety of vocational courses and large veteran enrollment. We selected one course for review at each school. In general, these courses had a large vet- eran enrollment. As discussed below and in the enclosure, we noted deficiencies in all provi- sions reviewed which limited VA's assurances that the act was being properly implemented. Since neither the 13 schools nor the 13 courses reviewed were statistically selected, the deficiencies noted cannot be considered representative of all courses affected by the act. However, because the deficiencies were due mostly to inadequate `VA policy and guidelines the following may be common deficiencies Some VA regional offices and State approving agencies did not process the schools' employment survey reports for the 50 percent rule as required. They did not always (1) identify all schools and courses for which survey reports were required, (2) adhere to prescribed timeframes for processing re- ports, and (3) verify the mathematical accuracy of data on the reports. Also, the validity of several schools' surveys and their reporting was questionable. There was no clear definition of a VA subsidized student for purposes of com- puting the 85 :15 ratio. Also, school officials were not certain whether it was their responsibility to make the ratio calculation and retain documentation to Indicate their compliance with the rule. VA had no acceptable standard for determining whether a course was avoca- tional or recreational, and in fact, the survey form seemed to discourage veter- ans from indicating that a course they took was for personal enrichment, avoca- 1Follow-up Work on Veterans Taking Correspondence Training (B-114859, June 5, PAGENO="0845" 3465 tional or recreational reasons. Also, neither VA nor State agencies systematical~y reviewed school advertising. During our review, we discussed our findings with VA officials and in some instances corrective action was taken. We are recommending additional actions in this report to provide further assurance that the four provisions of the act discussed above are effectively implemented. As discussed with your office, formal comments were not obtained from VA. However, this report has been discussed with VA officials, and their comments have been Included as appropriate. Also, as discussed with your office, copies of the report are being sent to the Administrator of Veterans Affairs, other Congressional Committees, Members of Congress, and other interested parties. Sincerely yours, Acting Comptroller General of the United ~Sttate8. Enclosure. RESULTS OF GAO REVIEW ON THE IMPLEMENTATION OF CERTAIN PROVISIONS OF THE VIETNAM ERA VETERANS' READJUSTMENT ASSISTANCE ACT OF 1974 (PUBLIC LAW 93-508) BACKGROUND In the past, it was indicated that vocational schools were (1) catering pri- marily to VA subsidized students, (2) using false and misleading advertising to coax students to enroll, and (3) providing low quality instruction. Because of these indications, Public Law 93-508, December 3, 1974, provided that the VA Administrator shall not approve the enrollment of a veteran in any vocational course (1) unless it is shown that at least one-half of the graduates of that course have been employed in a field related to their training, (2) in which more than 85 percent of the students are having any part of their tui;tion subsidized by the VA or the school, (3) which is avocational or recreational in nature, or (4) offered by an institution that utilizes deceptive or misleading advertising. VA is responsible for implementing the act. To determine whether VA was complying with the above provisions of the act, we made a review at the VA central office, Washington, D.C., and at 7 VA regional offices, 8 State approving agencies, and 13 shcools in Florida, Georgia, Illinois, Indiana, Maryland, Ohio, and Washington, D.C. Seven of the schools were correspondence schools, four were resident vocational schools, and two were flight schools. The 13 schools selected for review offered a wide range of courses with voca- tional training in electronics, computer technology, accounting, truck driving, barbering, air conditioning/refrigeration, hotel/motel management, automobile repair, and aircraft operation. We selected one course for review at each of the 13 schools. In general, each course had a large veteran enrollment. At these sites we interviewed officials and reviewed policies, regulations, pro- cedures, reports and records. Also, we telephoned a sample of the graduates from each school we visited to verify the accuracy of information on the students as reported by the schools. THE 50 PERCENT EMPLOYMENT RULE Sections 203(1) and 207(1) of the act (amending respectively, sections 1673(a) (2) and 1723(a) (2) oftitle38TJ.S.C.) provided: The Administrator shall not approve the enrollment of an eligible person in any sales or sales management course which does not provide specialized train- ing within a specific vocational field, or in any other course with a vocational objective, unless the eligible person or the institution offering such course "sub- mits justification showing that at least one-half of the persons who completed such course over the preceding two-year period, and who are not unavailable for employment, have been employed in the occupational category for which the course was designed to provide training (but In computing the number of persons who completed such course over any such two-year period, there shall not be included the number of persons who completed such course with assist- ance under this tttle while serving on active duty) . . ." (The 50 percent em- ployment rule) PAGENO="0846" 3466 VA is responsible for implementing the 50 percent employment rule; however, to do so it sought the help of State approving agencies and subject schools. The schools were to survey the graduates of each course during a 2-year period to ga~ther employment information. Usually the graduates were furnished a VA- developed qeustionnaire (see appendix I) to complete and return to the school. The schools were required to summarize the responses for each course and report them to the appropriate State agency (See appendix II). The State approving agencies were to review the survey results submitted by the schools, approve or disapprove the courses, and forward the information to the appropriate VA regional office. VA contracted with the State agencies (gen- erally a unit of the State Office of Education or a separate State training agency under contract with VA) to inspect, approve, and supervise schools and courses for training of eligible persons under the education program authorized by 38 U.S.C. 1651 et seq. (G.I. Bill). The regional offices were instructed by the Admin- istrator to suspend enrollments in all non-complying courses. IMPLEMENTATION OF 5URYEY BY REGIONAL OFFICES AND STATE AGENCIES Requirements Regions received survey instructions from the VA central office for distribu- tion to State agencies and schools by June 2, 1975. The regions were to maintain contact with the State agencies during the survey and the reporting stages to help resolve questions or problems. When a survey report for any course was delinquent or showed that the 50-percent requirement was not met, further enrollment of VA trainees in that course was not to be allowed by VA until the State agency certified that the 50 percent employment rule had been met. Regions were responsible for reviewing the State agency and school records on a spot check basis to assure compliance with survey instructions. The State agencies were also responsible for reviewing all survey reports for mathematical accuracy and compliance with prescribed procedures. schools and courses requiring a survey not identified In five of the seven areas that we reviewed, regional offices and their State approving agencies did not coordinate with each other to identify all schools and courses subject to the 50 percent employment survey requirements. Without this information they had no assurance that the affected schools conducted the survey for each of their courses. As an example, one State agency was unable to identify all courses for which surveys were delinquent because it did not have a complete list of courses sub- ject to the surveys. In processing surveys, the State agency used a directory of schools to account for survey reports received. When one or more reports were received from a school, State agency officials placed a check mark beside the school's name in the directory. The school names reported to the regional offices in December 1975 as having delinquent surveys were those believed to be sub- ject to the 50 percent rule and not having a check mark recorded in the directory. This processing method was not a reliable check on schools with more than one course subject to a survey. In that case, if there was a check mark beside the school's name in the directory, that school was considered to be in compliance even if it had not submitted all of its required surveys. The regional office could not rely on the State's report since courses for which surveys were delinquent were not identified, and the region could not develop better data itself because it also did not have a complete listing of the courses. Two regional offices' lists of schools and courses subject to the 50 percent employment ru1e did not agree w-ith those of State ageucies. For example. one regional office claimed to have 40 schools and 194 courses in its jurisdiction while the respective State agency claimed to have 36 schools and 180 courses. In another case, a regional office provided us with a list of 426 schools subject to the 50 percent placement requirement. The State agency list had the names of 353 schools. Our review showed that there were schools on the region's list which were not on the State agency's list and vice versa. Another regional office could identify the schools and courses for vocational/technical, flight arid cor- respondence institutions. however, it could not identify courses at institutions of higher learning that were subject to the requirement. We also found that two VA regional offices sent employment survey instruc- tions to all schools in their jurisdiction without regard to whether the schools were subject to the requirement. PAGENO="0847" 3467 When we discussed the problems cited above with VA central office officials, we suggested that the VA revise the survey instructions to require regional of- fices and State agencies to 3ointly identify schools and courses subject to the requirement. The officials agreed that such coordination was needed and revised the survey instructions accordingly. Processing dates not adhered to VA required that schools that were subject to the 50 percent rule survey their graduates and report the results to the appropriate State agency by July 1, 1975. However, if this was not possible, the schools could request an extension from the State agency to November 1, 1975. When a request for an extension or survey results was not received by July 1, 1975, the State agency was to notify the VA regional office and new enrollments were to be suspended for the courses involved. State agencies and the VA were to take similar action if survey reports were not received by November 1, 1975. VA gave State agencies until December 1, 1975, to review the survey results submitted by the schools, approve or disap- prove the courses, and forward the information to the regional offices. The re- gional offices were to take immediate action to suspend enrollments for courses which did not meet the criteria. In four regions the processing dates were not adhered to. A blanket extension to November 1, 1975, was granted to all schools, State agencies did not forward the surveys to the VA by December 1, 1975, or the regional offices did not take immediate action when data was received to suspend enrollment in courses which did not meet the criteria. In one region the State agency gave a blanket extension to all schools whether they requested it or not. Furthermore, it did not notify the regional office of the surveys that were delinquent until early December 1975. The extent is unclear to which the regional office contributed to or concurred with the blanket exten- sion and with omitting the reporting of delinquent surveys at November 1, 1975. A State agency official told us that regional office officials actually suggested the blanket extension and were in agreement that the State agency did not have to report any overdue surveys until December 1, 1975, after their processing was completed. However, the official was unable to furnish documentation to this effect. VA regional office officials stated that they had been unable to prevent the State agency's actions because they had no real supervisory authority over the State agency. VA regional office officials told us that they were not informed until November that the backlog of work at the State agency had prevented any reporting until December 1975. VA officials in another region told us that they were not notified of those sehools which had neither submitted an employment survey by July 1, 1975, nor requested an extension to November 1, 1975. According to these officials, the regional office conducted a telephone survey of the schools in their jurisdiction in late July 1975, because (1) so few schools responded by July 1, 1975, (2) the State agency had a heavy workload, and (3) attendance was poor at the State agency's workshops where school responsibilities were discussed. The purpose of the telephone survey was to remind the schools of their responsibilities under Public Law 93-508 and to ask them if they wanted an extension to November 1, 1975, to submit their employment survey. The regional officials said that the telephone survey resulted in their granting the blanket extension to all schools in their jurisdiction. A third regional office, with the concurrence of the VA central office, granted an extension to all schools until November 1, 1975. The extension was granted because the State agency did not inform the region of those schools which failed to submit survey results or request an extension by July 1, 1975. The State agency dId not report any surveys as delinquent because it assumed that all of the schools would request the extension. In addition, the State agency representa- tive for vocational course accreditation retired July 1, 1~75, and was not replaced until August 30. 1975. At a fourth region, the State agency reported to the VA the schools that did not submit the survey results or request an extension by July 1, 1975. However, the State agency did not submit information on the remaining schools until January 14, 1976, because it was verifying all survey forms submitted by the schools. In addition, the rerional office did not take action to suspend enrollments in any courses hased on the information received on January 14, 1976, because the VA did not have a complete list of affected courses (as discussed on page 3). Instead, the regional office requested the State agency to provide a list of courses PAGENO="0848" 3468 not meeting the 50 percent placement requirement. This list was received by the regional office on February 18, 1976. Inadequate review of survey reports by ~t~te agencies At each region visited we reviewed a sample of the survey reports submitted by the State agency for mathematical accuracy and compliance with survey instructions. At three regional offices we found few or no errors. However, at four regions we found numerous errors ranging from 20.8 percent to 45.7 percent. The number and type of errors indicated that no more than a marginal review of the reports was made by the State agencies prior to their submission to the regional offices. For examples, at one region we randomly selected 175 of the 1,229 survey reports and noted errors in 80 or 45.7 percent of these as follows: 6 reports contained only mathematical errors. 40 reports did not include graduates over a 2-year period as required. In 27 reports the survey period was omitted completely; in 9 reports the survey period exceeded 2 years; and in 4 reports the survey period was less than 2 years. 6 reports contained only procedural errors by the State agency. In 5 cases it failed to approve or disapprove the course. In the other case, the State agency disapproved the course when it should have been approved. 28 reports contained a combination of the errors described above. We discussed with officials of State agencies the problems that they had in accomplishing their review of survey results. One official said he was not aware of the high error rates. He said be tried to check for mathematical accuracy and compliance with required survey procedures, but the processing of the employ- ment surveys was an additional burden for which the agency was not authorized additional staff. He said that his staff was not familiar with compliance work and had to learn as they went. Officials of other State agencies summarized the problems they had as follows: Not enough time. The July 1, 1975, deadline w-as unrealistic since the survey instructions were not distributed to the schools until June 1075. Not enough staff to administer the program and conduct an in-depth review of survey results. One agency had to hire additional clerical help. IMPLEMENTATION OF SURVEY AT SELECTED SChOOLS Requirements Schools were required to survey the graduates of each vocational course which was currently approved or for which approval was being sought under the pro- visions of the G.I. Bill. For each course, they were to identify those persons who had completed or had discontinued training during a designated 2-year period. From these, the schools were to eliminate those persons who discontinued or completed their training while in the armed forces. The remaining graduates w-ere to he in the survey unless the course had in excess of 300 graduates. If there w-ere in excess of 300 graduates, a school had the option to select a random sample of 300. Schools were required to send out VA questionnaires to graduates unless the school could verify that it already maintained employment experience data on at least 75 percent of these people. The school used either the question- naire responses or their own records to complete the survey reports for each applicable course. Problems experienced by schools with survey instructions At each of the 13 schools we made a detailed review of their compliance with the survey procedures. Each of the courses reviewed had been certified by a State agency as having met the 50 percent rule. Our review showed that survey results were questionable because several of these schools used invalid survey procedures. Two schools did not survey all the appropriate people. For example, one school surveyed 51 people, and our review showed that 83 persons should have been surveyed. Another school surveyed 18 when 27 should have been surveyed. One school used an incorrect basis for determining the survey population. It used the date students finished paying for their courses as the graduation date. As a result, some people who completed their courses as early as 1070, but who did not make their final payment until the survey period, were included in the survey. Conversely, some people who completed their courses and passed their final exam during the survey period were not surveyed because they had not fully paid for their courses during the period. PAGENO="0849" 3469 We also noted that schools classified questionnaire responses inconsistently. Some accepted student responses as presented, while others reclassified them. Some schools believed that the graduate was in the best position to judge whether his or her work was directly or closely related to training received, so they accepted the graduate's judgment without regard to conflicting information that might be on the questionnaire. The educational director at another school informed us that he had personally reviewed and interpreted every graduate response received in the survey and had classified them based on his judgment of the overall theme of the responses. The director said that although there were no VA instructions on the interpreta- tion of responses, he believed that he had to reclassify some of them because many of the respondents' classifications did not seem reasonable. We discussed the problems cited above with VA central office officials and suggested that the VA improve guidelines for c1assif~ving graduates and inter- preting questionnaire responses. VA officials agreed and revised the instructions accordingly. Co~i clusions The 50 percent employment rule has not been properly implemented. Therefore, VA has not had information needed to determine whether vocational training courses have been of sufficient quality to warrant approval for veteran enrollment. RECOMMENDATIONS TO THE VA ADMINISTRATOR To help insure proper implementation of the 50 percent employment rule, we recommend that the Administrator urge the VA regional offices and State agencies to perform their assigned functions in processing school employment surveys including: Processing the forms in a timely manner and Reviewing the forms to detect errors and omissions in the surveys. THE 85 PERCENT ENROLLMENT RULE Section 203(3) of the act provides: "The Administrator shall not approve the enrollment of any eligible veteran, not already enrolled, in any course (Other than one offered pursuant to sub- chapter V or subchapter VI of this chapter) w'hich does not lead to a standard college degree and which is offered by a proprietary profit or proprietary non- profit educational institution for any period during which the Administrator finds that more than 85 iercentum of the students enrolled in the course are having all or l)art of their tuition, fees, or other charges paid to or for them by the educational institution or the Veterans' Administration . . ." (The 85 per- cent enrollment rule). To implement the 85 percent enrollment rule VA required the affected schools to certify, when each new veteran enrolled, that the veteran/non-veteran ratio for that course was not in excess of 85 :15. In addition, VA compliance surveys by regional offices determine whether the 85 :15 ratio was being exceeded. State agencies have no responsibilities for implementing this rule. CONFUSION OVER THE DEFINITION OF A VA SUBSIDIZED STUDENT None of the 13 courses we reviewed appeared to be in violation of the 85 percent enrollment rule. However, three schools had used what appeared to be questioaable criteria in determining VA subsidized students for calculating the 85:15 percent ratio. For example, one correspondence school defined a VA subsidized student as one for w-hom lessons had been certified to VA for payment. Veterans who were newly enrolled and had not yet had lessons certified to VA would be counted as non-subsidized under the school's definition. School officials told us that a lag of up to 4 months could occur before a newly enrolled veteran would have lessons certified to VA and be counted as a VA subsidized student. The school's defini- tion of a VA subsidized student was based on its interpretation of the description of such students in Public Law 03-508 as "having all or part of their tuition, fees, or other charges paid to or for them by the educational institution or the Veterans' Administration. . ." School officials believed that until the school had certified one or more lessons to VA for payment, the student had not actually had anything "paid" by the VA, and there was no assurance that he ever would. 78-226 0 - 77 - 54 (Pt. 4) PAGENO="0850" 3470 Another correspondence school classified students as VA subsidized only during the period that they received VA benefits. Students with only enough VA eligibility to cover part of their tuition were counted as being VA subsidized only as long as they received VA benefits. When such benefits were exhausted, they were counted as non-VA subsidized for computing the 85 :15 ratio. The school also considered students who have completed a course and received VA benefits for the full tmtion as currently enrolled non-veterans if they had not yet paid all of their tuition to the school. For flight schools, VA requires a daily flight record be maintained, winch clearky shows the number of hours of flight instruction or the charges for the instruction given to VA and non-VA students. A flight school cannot enroll a veteran if the total hours of veteran instruction or charges in approved courses during the 30- day period immediately preceding the date the veteran enrolls exceeded 85 per- cent of the total hours or charges for all students for that course. At one flight school the hours flown were recorded on the log either as part VA subsidized and part nOn-VA subsidized, depending upon how- time students indicated they planned to pay-w-hether they would certify the hours to VA for payment or pay for the flight instruction on their own. We discussed the above situations with VA central office officials, and as a re- sult, VA's office of general counsel is presently working on a definition of a VA subsidized student to be used in calculating the 88 :15 ratio. NEED TO CLARIFY SCHOOLS' RESPONSIBILITIE5 REGARDING CALCULATIONS OF RATIO Four schools had not, each time new veterans were enrolled, calculated their course enrollment to assure compliance with the 85 percent eniolimeat rule. Offi- cials of all four schools told us that they w-ere aware that they were certifying compliance with the rule without making the calculations, nonetheless, they were sure their courses met the requirement and did not consider it necessary to cal- culate and document the ratio. VA officials told us that there is no current re- quireinent for schools to document the ratio calculation. CONCLUSIONS VA has not properly implemented the 85 percent enrollment rule because it has not fully defined (1) a VA subsidized student or (2) a school's responsibilities in calculating the 85 :15 ratio and retaining documentation to support its compliance with that rule. RECOMMENDATIONS TO THE VA ADMINISTRATOR To help insure adequate implementation of the 85 percent enrollment rule, we recommend that the Administrator define: a VA subsidized student for purposes of calculating the ratio of veterans to non- veterans. a schools responsibility for making tile ratio calculations and documenting their compliance with the rule. COURSE CHARACTER AND ADVERTISING PROVISIONS Sections 203(2) and 207(2) of time act amended 38 U.S.C. sections 1673(a) (3) and 1723(a) (3) to provide that the Administrator shall not approve the enroll- meat ot an eligible person in any type of course w-hich time Administrator deter- mines to be avocational or recreational in nature or the ath-ertising for which he believes contains significant avocational or recreational themes. This type of course w-ihl be approved only if the eligible person submits justification that the course w-ill be of bona-fide use in the pursuit of his present or contemplated busi- ness or occupation. (The course character l)rOvision.) In addition Section 212(a) of tile act provides: The Administrator shall not approve the enrollment of an eligible veterami or eligible person in any course offered by an institution which utilizes advertising sales, or enrollment practices of any type w-hich are erroneous, deceptive, or mis- leaching either by actual statement, omission, or intimation." (The advertising provision.) PAGENO="0851" 3471 IMPLEMENTATION OF THE COURSE CHARACTER AND ADVERTISING PROVISIONS Req uirenients On the survey form (see ap~jendix I) graduates indicating they were unavail- able for employment were asked why. One of the possible answers was "1 took the course for personal enrichment, avocational, or recreational purposes only (not under the G.I. Bill) ." According to survey instructions, if VA feels that a signif- icant number of respondents gave this answer, VA was to contact the school, and the school was to prove that the course was not avocational or recreational. To implement the advertising provisions VA entered into a formal agreement with the Federal Trade Commission (FTC). Under certain circumstances VA was to refer advertising material to the FTC which was considered erroneous, decep- tive, or misleading. The FTC w-as to conduct an investigation, when necessary, and decide whether the advertising, sales, and earolinient practices in question w-ere actually erroneous, deceptive, or misleading. VA'S DETERMINATION OF WHETHER A COURSE IS AVOCATIONAL OR RECREATIONAL We review-ed the employment survey forms for each of the 13 courses and noted that in one course, 177 of the 364 questionnaire respondents stated they took the course for personal enrichment, avocational, or recreational reasons. As of Sep- temnber 1976. 8 months after the survey report was received, the regional office had taken no action to require the school to prove the course was not avocational or recreational. When we telephoned a sample of graduates from the course to verify their responses, we found an additional 19 graduates from a sample of 44 who had initially responded in another questionnaire category, who took the course for personal enrichment, avocational, or recreational reasons. Thus, over half of the graduates took the course for such reasons. In our opinion, the phrase, "not under the G.I. Bill" cautions recipients of G.I. Bill benefits to choose one of the other responses on the questionnaire. This in turn will understate the personal enrichment, avocational or recreational response and overstate other responses. We discussed our observations with VA central office officials who said that the VA had no established standard for determining whether a course is avocational or recreational. We suggested that it establish a standard. VA revised its instruc- tions so that if 50 percent of the persons surveyed indicate on the questionnaire that they took the course for avocational or recreational purposes, the school w-ould be required to prove that the course was not avocational or recreational in nature. We did not agree with this revison and believe that VA should consider the number of questionnaire respondents rather than the number of persons surveyed. VA officials agreed to reconsider their criterion for judging when a course should l)e considered avocational or recreational. We also discussed with VA our opinion that the phrase "Not under the G.I. Bill" encourages veterans to resl)ond in a category other than "Personal Enrich- meat, Avocational, or Recreational." In accordance w-ith our suggestion, VA re- vised the form to omit the parenthetical expression. AVOCATIONAL AND RECREATIONAL THEMES IN ADVERTISING At each of the 13 schools visited, we verified, the accuracy of advertising claims regarding: The size or experience of the school, The school's affiliation with w-ell-know-n companies or training programs. The availability of expert instructors, guest lecturers, or teaching aids Availability of school placement services, Employment opportunities or expected eari~ings, and Success of former students in finding related employment. We also review-ed all advertising material for avocational or recreational themes. Of the 13 courses, we noted only one that had avocational and recrea- tional themes in some of its advertising. This advertising had the follow-ing phrases- `why pay repair bills, when you can learn to fix your own car at home in your spare time" and "30 lesson tune-up course is a basic repair course that will save you a lot on your car upkeep." We discussed with the school and VA central office officials the advertisements containing avocational and recreational themes, and the school officials agreed PAGENO="0852" 3472 to change the advertisements. VA officials said they were aware of the particular school and course advertisements and were taking steps to have them corrected. NEED FOR SYSTEMATIC REVIEW OF SCHOOL ADVERTISING Regional and State agency officials said they would object to misleading claims or significant avocational or recreational themes which they identified while re- viewing advertismg. However, neither regional nor State agency officials linda continuimig ~irograin to collect and review school's advertisnig. They said that, in general, actioii was taken when the regional office or the State agency received complaints from students about advertising or they otherwise became aware of questionable advertising matter. * VA central office officials recognized that this was a problem, but they told us flint they had no l)lans to correct it. CONCLUSIONS We believe that VA has not adequately imnpleniented the course character and advertising provisions. This l)elief is supported by the following VA had no standard to determine what percentage of responses indicated that a course was avocational or recreational. As a result of our review, survey in- structions were revised to indicate that the nature of a course was personal en- richment, avocational, or recreational when 50 percent or more of the persons to be surveyed indicated that they took time course for one of those reasons. We (10 not agree with this revision. It would l)e more meaningful to base a percentage on the nmnber of persons responding to the questionnaire. Also, we believe that 50 percent may be too high a standard. VA did not have a system to collect, review, and analyze advertising material, so it. could not adequately identify which advertising should be referred to the * FTC. RECOMMENDATIONS TO THE VA ADMINISTRATOR To help insure adequate implementation of the course character and advertis- ing provisions of the act, we recommend that the Administrator: Determine whether (1) a course is avocational or recreational on the basis of the number of questionnaire respondents rather than on the number of per- sons surveyed and (2) a lower percentage for the standard is more reasonable. Establish procedures to systematically collect, review, and analyze advertis- ing material to facilitate monitoring of school advertising. Mr. HARTKE. Mr. President, a number of staff people have worked long hours to help fashion the bill which is before you today. While it is not possible to name them all, I particularly want to mention the work of committee staff members Guy H. McMichael III, Jack Wickes, Harold Carter, Cindy Prather, and Janese Kennedy. Tyler Craig, Gary Crawford and Jim Medina of the minority staff were also invaluable in helping the Committee arrive at its consensus. As usual, Hugh Evans, Senior Counsel, Legislative Counsel's Office, brought his expertise to bear on this bill, and prevented us from a number of errors which we might otherwise have made. Veterans' Admnimiistratiomi staff members were of great assistance to the Committee. In particular I want to point the outstanding technical assistance rendered by Robert Dysland, Andrew' Thornton. June Schaeffer and Myron Wolowits. The General Accounting Office prepared a number of reports which were of assistance to the Committee. and in particular, I want to cite the work of Harry Johnson. Bill Robinson and Ilona Rashkow of the Congressional Research Service, were a~lso of great assist- ance to the Committee in its development of chapter 32, and in supplying back- ground research material. Mr. GARY HART. Mr. President, I am proposing amendment No. 2318 to S. 969 to amend title 38, United States Code, sections 211(a) and3404(c) to provide for the judicial review of administrative actions of the Veterans' Administration and to allow veterans full access to legal counsel in proceedings before the Veterans' Administration. The Veterans' Administration differs from other Federal agencies in that its regulations and most of the resulting adjudicated decisions on individual cases are not subject to the scrutiny of the Federal courts. Under title 38, United States Code, section 211(a) the Veterans' Administration is insulated from judicial review, thus denying veterans and their dependents or survivors access to due process of law on decisions of benefit eligibility. PAGENO="0853" 3473 Adjudication of VA benefits falls mainly within two areas: disability eligibil- ities and pension eligibilities. In each instance, a local three-member rating board, made up of VA employees, determines the veteran's eligibility and level of disability payment. The only recourse for a veteran desiring to challenge this determination is an appeal to the Board of Veterans' Appeals, also composed of VA employees in Washington, D.C. The decision of the Board is final and unless new and material evidence is presented, the case is closed. At no point in the process are there provisions for review of VA regulations and adjudicative decisions by persons outside the agency. Most Federal agencies are subject to the Administrative Procedure Act (title 5 U.S.C.) which allows judicial review of final administrative actions. Under section 701 of that act, "a person suffering a legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute" can seek judicial recourse. The court can determine whether the agency observed the statutory requirements and adhered to con- stitutional requirements in its application of administrative procedures. For example, the Social Security Administration, which uses procedures similar to the Veterans' Adminisfration's in establishing disability claims, is covered by the Administrative Procedure Act, and thus its decisions are ultimately subjected to the scrutiny of the Federal courts. Although veterans may be represented by attorneys in proceedings before the Veterans' Administration, section 3404(c) of title 38 limits attorneys' fees to $10. The fee limitation, which was implemented more than a century ago in the best interest of the veteran, now imposes a severe burden on veterans seeking just treatment. Less than 2 percent of the claimants appealing to the Board of Veterans' Appeals are represented by legal counsel. Currently, vet- erans can obtain assistance without charge in the presentation of their claims before the Veterans' Administration from national veterans service organization representatives and VA counselors. In most cases, the assistance provided by these counselors is of sufficient quality and provides the VA Rating Board with sufficient evidence to render a fair and equitable decision on the claim. However. if a veteran desires the representation of an attorney in these proceedings, the prohibitive fee restriction of $10 places severe restraints on this right. I believe this de facto prohibition of legal representation may be a denial of the veteran's right to due process as provided by the fifth amendment. Veterans who desire outside legal representation in VA proceedings should be able to exercise that right. In this regard, too, the Social Security Administration offers a far better system. Although it was also once bound to the $10 fee limitation, that agency long ago instituted a sensible formula to determine reasonable attorney'~ fees on a case-by-case basis. Legal representation more than doubled as a result. It is time for the VA to follow suit. Mr. President, opponents of this proposal argue that opening the VA to ju- dicial review would flood the Federal courts with cases. That claim, how-ever, is l)aseless. The Veterans' Administration does process tens of thousands of benefit claims annually, but a review of the statistics shows that the Board of Veterans' Appeals, the final review-ing body for disputed claims, handled only 43,000 cases, or a frac- tion of the original number, in fiscal year 1975. Of these, 26,000 were reversed or remanded to the local rating boards for their reconsideration. This left approxi- mately 17,000 cases which could have been brought before Federal courts for review. This number would likely be even smaller because of the financial bur- den of litigation and the refinement of the internal claims adjudication procedures of the VA. It must also bepointed out that the veteran must exhaust all internal administrative remedies and follow the procedures set forth in the Administrative Procedures Act before a case can he brought before the Federal judiciary. The real issue, however, is clear. Do w-e deny the American veteran access to judicial review because Congress feels justice is too expensive or would in- crease the work load of our judicial system? I think not. Some opponents to the concept of judicial review of VA decisions also say that such issues as disability compensation and benefit eligibility are too tech- nical for the courts to review-. But that argument ignores the fact that most other agencies such as the Social Security Administration with its complex and technical regulations, are subject to independent review by the courts of their adjudicative procedures. Furthermore, the Federal court, under the guidelines of the Administrative Procedures Act, would only entertain appeals for the re- view of a final VA action if it is alleged that the final action: First, is arbitrary PAGENO="0854" 3474 and capricious; second, is an abuse of discretion; third, is an excess of statu- tory jurisdiction; fourth, failed to observe the procedure as required by law; or fifth, was otherwise unlawful. Still another argument against judicial review is that it would destroy the uniformity of VA decisions. It is my belief that an independent review of VA regulations, under the provisions of the Administrative Procedures Act (Title 5 U.S.C. sections 556 and 557), and review of individual VA adjudicated decisions will only improve the uniformity of the decisionmaking process. My research has exposed a marked disparity between VA regional offices in decisions handed down in veterans' cases. For example, the Deiiver Regional Office has indicated that in the adjudication of other-than-honorable discharge cases in 1975, only 10 percent were ruled eligible for benefits while the Minnesota VA Regional Office ruled that 25 percent of those veterans with other-than-honorable discharges were eligible for VA benefits. This evidence appears to indicate a current lack of uniformity of VA decisions within the system. If judicial review were granted, more uniformity of the VA I)rocedures-1~ot less-would be the result, and this would strengthen the adju- dicative process. Although the VA now publishes its proposed rules and regulations, which ultimately govern its administrative and adjudicative procedures, it is not re- quired to do so under Federal statute. Once these regulations become final, they are not subject to the scrutiny of the Federal judiciary. Therefore, the Veterans' Adnunistration not only writes its own rules and regulations but they are immune from the public and judicial review that most other Federal agencies are subject to under law. Once the VA renders a final decision on the case, that decision is final. To the veteran, this means that not only are the administrative decisions which determine his benefit eligibility exempt from court review, but so are the regulations and procedures which shape those decisions. There is no avenue for appeaT outside the agency. Mr. President, I believe a fundamental issue before Congress today is the ac- countability of Federal agencies. To deny a citizen access to an attorney, and also to isolate a Federal agency from the scrutiny of the Federal courts goes against the very principles of our constitutional system. We must protect our citizens from the potential of arbitrary and capricious agency action. Mr. HARTKE. Mr. President, my distinguished colleague from Colorado (Mr. Hart) has incisively analyzed the questions of statutory preclusion of judicial review of Veterans' Administration determinations and the statutory limitation of $10 on attorneys' fees. As a Senator, and, parenthetically as a lawyer, I, too, am concerned that determinations of eligibility for veterans benefits are made in a manner consonant with our notions of due process. As you know, any constitu- tional question concerning veterans' benefits, including denial of due process, is subject to judicial review in our Federal court system. Veteran benefit questions, which are not of a constitutional nature, are not subject to such review, however. The questions raised by the hard w-orking Senator from Colorado are impor- tant ones. Thus. I want to thank him for bringing these views to the floor and for once again displaying his active concern for all veterans. Unfortunately, the committee has not had the opportunity to examine these complex issues with the requisite care demanded. The issues raised are not simple. For example, we do not know w-hat impact the Senator's amendment would have on the workload of the Federal court sys- tem. Last year, the Board of Veterans' Appeals decided over 43,000 cases. Efforts to resolve the questions raised by my distinguished colleague would be appreciably enhanced were the committee given an opportunity to consider the implications and ramifications of tl1is or alternative proposals during the next session. It would be my intention that included as part of that examination would be full-scale hearings during which all interested parties would be afforded an opportunity to testify. These would include representatives of the Veterans' Ad- ministration, the Justice Department, bar association, national veteran organi- zations, as ~vell as interested citizens. It would both be appropriate and necessary to offer these groups and individuals the opportunity to express their respective opinions as to w-hether and to what extent there should be judicial review and limitations on attorneys' fees. Because the committee has not had an oppor- tunity to explore these issues in depth and because the House committee could also be expected to object to such a provision without hearings, I wonder if the PAGENO="0855" 3475 Senator would withhold his amendments upon the assurance that full-scale hear- ings will be held in the next session of Congress on the issues which have been raised. Mr. GARY HART. Mr. President, I know that it is important to offer interested 1)arties the opportunity to express their views on the questions. As I have pre- viously stated, these are important and far-reaching questions-potentially mil- lions of veterans would be affected by whatever determination Congress makes. Thus, with the assurance from the chairman that the committee will hold com- prehensive hearings concerning these issues next session, I will withhold my amendment. Mr. HARTKE. Mr. President, I appreciate the junior Senator froni Colorado withholding his amendments. As a starting point in the examination of the issues raised by Senator Hart, I ask unanimous consent that the following law review article be printed in the RECORD. There being no objection, the article was ordered printed as follows: PRECLUSION OF JUDICIAL REVIEW IN THE PROCESSING OF CLAIMS FOR VETERANS' BENlo~ITs: A PRELIMINARY ANALYSIS (By Robert L. Rabin*) Power tends to corrupt, and absolute power corrupts absolutely. Lord Acton's aphorism has more than stood the test of time. Read in the context of administra- tive action, his admonition underlies the popular tendency to consider access to court a fundamental aspect of due process of law-. In a much-cited case, Abbott Laboratories v. Gardner, the Supreme Court spoke in terms of a "basic presump- tion of judicial review of administrative action." [1] Although rarely a point of contention, that pronouncement has been enthusiastically reaffirmed in later decisions. [2] Indeed, wholly apart from the judiciary, a broad consensus un- doubtedly exists that access to court ought to he guaranteed to those complaining of arbitrary treatment by administrative officials. Using the federal statutes as a measuring stick, one would search long and hard for an explicit congressional exemption of administrative action from judicial review. [3] A sufficiently diligent search, how-ever, reveals one striking instance of un- fettered administrative discretion. The Veterans' Administration stands in splen- (lid isolation as the single federal administrative.agency w-hose major functions are explicitly insulated from judicial review. [4] And those functions are truly major, w-hether measured in dollar or caseload terms. In 1973, the agency expended $6.6 billion on almost 5 million active disability and pension cases, its two principal benefit-disbursing activities. [5] Moreover, the agency's activities are not limited to the rote performance of routine, nondiscretionary benefit determina- tions. In 1973, claimants filed over 50,000 appeals with the final arbiters in the administrative system. [6] Nor does the VA deal merely with a short-term spill- over from our involvement in Vietnam. The rather startling fact is that even if we never engage in another w-ar, the agency-if its present functions remain intact-w-ill l)e engaged in the distribution of benefits a century from now. [7] Like other high-volume benefit-distribution systems, the Veterans' Administra- tion has largely avoided critical attention from reformers and academics. [8] The mainstream of interest in agency practices has focused primarily on the regula- tion of important commercial activities and the restriction of vital civil liberties. But in view of its significant impact on such a substantial number of individuals, the Veterans' Administration is simply too important to l)e written off as an insignificant part of the administrative system. [9] The case for examining the operations of the VA is especially compelling in light of the agency's insulation from judicial review. Unreviewable administra- tive discretion, as suggested at the outset, can serve as a corrupting influence. Moreover, the absence of a forum for review reinforces the low level of visibility afforded any federal agency administering a massive benefit-distribution system. Our starting point is the preclusion statute itself, which provides that: [T]he decisions of time Administrator on any question of law or fact under amiy law- administered by tile Veterans Administration providing benefits for veterans amid their dependents or survivors shall be final and conclusive and no other official or any court of tile United States shall have power or jurisdiction to review- any such decision by an action in the nature of mandamus or other- wise." [10] References at end of article. PAGENO="0856" 3476 This statute has proved to be a truly impressive l)arrier to judicial review, withstanding ieriodic forays in the judicial forum and the halls of Congress attempting to reduce it to rlthl)le. [ill Indeed, the roost recent congressional amendnient to the VA statute sealed an opening deftly secured by the ingenuity of the Circuit Court of Appeals for the I)istrict of Columbia [12] and a 1974 Supreme Court opinion appears to provide additional fortification to the pre- clusion mandate. [13] Although the VA's isolation from judicial scrutiny may be anachronistic, it is hardly through political oversight. The interesting question, of course, is whether explicit precision can be justi- fled. The discussion that follows explores various aspects of that question, rang- big from constitutional considerations to administra tive practicalities. I would emphasize, however, that I view this Essay as exp1orat~ry in nature. While I state my conclusions on those issues that can be examined without exhaustive investigative data, my principle objective is to clarify the issues that require more detailed empirical work. At the same time I hope to achieve the broader goal of illustrating some of the tensions that exist between a high volume benefit- distribution system and our political-cultural notions of due process. But this Essay should be read as a preliminary rather than a comprehensive analysis of time VA's claims-processing system. I. (ON STITUTIONAL 1)ISCOUR5D ON PRECLTJ5ION 1)espite its longevity, [14] the VA no-review provision was not construed by the Supreme Court until the 1973 Term. The case that finally brought section 211 (a) before that Court, Johnson v. J?obison, [15] involved a claim by a c011- scientious objector for educational benefits lmn(ler the Veterans Readjustment Act of 1966. Because Robison had performed alternative civilian service, he was demmied benefits on the grounds that he failed to meet time statutory requirement of service cmi active duty." Attacking time constitutionality of time active-duty requirement, Robison argued that the statute demmied his right to free exercise of religion and equal protection of the laws under tIme first and fifth amendments respectively. The VA countered by seeking dismissal under section 211 (a) as well as coil- testiiig his sul)stammtive constitutional claims. While the Supreme Court denied Robison's claim on time merits, it did grant him the right to judicial review, despite the language of section 211(a). Time Court distinguislmed a constitutional attack omm the statutory scheme from a contested individual benefit determination [Section 211(a)] would appear to l)e aimed at review only of those decisions of law or fact timat arise in the admninistratiomm by the Veterans' Admninistratioim of a statute providing benefits for veterans. A decision of law or fact "under" a statute is made by the Administrator in the interpretation or application of a particular provision of time statute to a particular set of facts. Appehlee's constitutional challenge is not to any such decision of the Administrator, but rather to a decision of Commgress to create a statutory class entitled to bemmefits that does iiot include i-U conscientious objectors who performed alternate civil- ian service. Thus, as thme District Court stated, `the questions of law presemmted in these proceeclimmgs arise under time Constitution, not under the statute whose validity is challenged." [16] Unfortunately, timis conceptual distinction between cases involving individual- ized application of the benefit provisions and those arisiimg under time Constitutioii is considerably more troublesome timami the Court w'as willing to recognize. Consider, for example, a disability claim by a veteran of wartime military service, which the VA contests on tIme groiumds that time claimant's injury does not have time required service connection. [17] The veteran, on the other hand, ii'gues that time agemmcy denied his claimmm because of his postdischarge antiwar activities as a headier of Vietnam Veteramms Agaimmst time `War. Obviously, time VA would conteimd that lmis cinimmi `arises under" the statute, amid is insulated frommm judicial review withiim the immeanimmg of Robison. Presumn- ably, the veteran would simmmilarly cite Robison imi support of his claim that the case "arises under" the Constitutioim--specifically, time first ammmendmnent guaramm- tee of free speech. The fact timat time target of time veteran's attack is not time exclusionary provision of a statute enacted by Coimgress serves as a dubious basis for distimmguishing Robison. In the abseimce of other salient factors, why should an aggrieved party's access to a judicial forum turmm on whether his first amendment protections have been abridged by a legislative classification rather than an admimmistrative decision? References at end of article. PAGENO="0857" 3477 Indeed, framing the question in first amendment terms in unduly restrictive. Consider a typical case where no `protected activity" is involved. The veteran's constitutional claim is that the administrator's refusal to recognize his injury as service connected is an arbitrary act, constituting a denial of due process law. Again, one confronts the question whether a hierarcy of constitutional claims ought to be established--a hierarchy that, by denying the claimant access to the courts, would tolerate administrative arbitrariness based exclusively on individualized factfinding determinations. Having indicated how RobiRon fails to suggest a satisfying basis for distin- guishing between statutory classifications and administrative benefit determina- tions, are we left with an unlimited access-to-court principle? First of all, asserting a constitutional compulsion to provide a judicial foruni in benefit- distribution cases is not tantamount to proclaiming a generalized right to judicial review of administrative activity. Where administrative decisions are "committed to agency discretion" it may be that courts ought properly to leave administrative decisions unexamined. [18] But the search for analogues to the VA process (lees not lead iii the direction of "political" decisions to close army bases or recognize foreign governments. Rather, the appropriate comparison is with other high-volume benefit-distribution systems such as AFDC and social security, where the right to judicial review has been largely unquestioned. [19] Secondly, however, even when due process concerns are clearly raised by explicit preclusion, it is quite another matter to assert an unqualified right to judicial review. The possibility still exists that the case for preclusion can be salvaged by a strong showing of the unique costs of reviewabihity in this par- ticular administrative system. And those costs must be assessed in the context of the distinctive risks of according finality to VA decisions if we are to make a meaningful determination of what process is due. [20] In the final analysis, I am suggestimig that a full exploration of due process considerations requires an empirical analysis of the VA claims-processing system. [21] In practical terms, however, the linedraw-ing effort in the Robi.son case indi- cates that the Supreme Court is unlikely to exten(i the access principle to veterans' benefit claims. Supporting evidence for this conclusion is offered by a Supreme Court decision in the previous Term. Ia Ortwein v. Schwab, [22] the Court by a 5-4 vote upheld Oregon's $25 appellate court filing fee in a case brought by a welfare recipient contesting the county agency's reduction of his old-age benefits. He argued that the filing fee denied him access in fact to judicial review. The Court disagreed, distinguishing the case from a contrary decision 2 years earlier involving divorce filing fees [23] oil the grounds that no "funda- mental interest' was at stake in Ortwein. [24] Whether the majority would extend this reasoning to an al)solute preclusion of review is uncertain, but time "fundamental interest' distinction is strongly reminiscent of the largely discredited rights-privileges dichotomy, [25] To heighten the uncertainty, the Ortwein majority went on to assert that the "Court has long recognized that, even in criminal cases, due process does not require a State to provide an appellate system." [20] The statement overlooks the fact that all the cases cited by the Court involved appeals from judicial decisions whereas Ortwein's basic argument w-as that he had been denied access to any court. [27] The Court's hesitatioii to embrace a constitutiOnal access principle must be read alongside an earlier view, Justice Brandeis' oft-repeated injunction in the St. Joseph k~tOek Yar(1S case, that `the supremacy of law demands that there shall 1)e opportunity to have some court decide whether an erroneous rule of law was applied: aiid whether the proceeding in which facts were adjudicated was conducted regularly." [28] Perhaps the statemnemit is inordinately broad, but in its simplicity it does state a common sense notion of elemental fairness. Indeed, it is the intrinsic appeal of the proposition that explains the lengths to which the Court has gone over the years to avoid explicitly holding that administrative bodies may be given final authority to determine important individual interests in liberty and property. On the other hand, an undoubtedly genuine concern for the ambiguities and complexities of the administrative system has restrained the Court from unre- served acceptance of the Brandeis principle. Thus, the Court is unlikely to invalidate the VA statute by proclaiming an absolute due process right to judicial review. Indeed, if it holds to the dubious References at end of article. PAGENO="0858" 3478 distinction enunciated in I?obison, `VA benefit claims may be insulated from ju- dicial scrutiny in the foreseeable future. On the other hand, one may hope that the Court will decide to include the preclusion question within its prescription that particularized analysis of an administrative scheme is required to deter- mine what process is due. [29] If so, an empirical analysis of the VA, focusing on the risks and benefits of administrative finality, seems essential. In fact, if such an analysis raises serious doubts about the wisdom of preclusion, it should be as relevant to Congress as to the Court. II. PRECLUSION AND THE ADMINISTRATIVE PROCESS A. The system on paper and the system in action: An overview Disability and pension cases generate the bulk of the contested claims for benefits. [30] Since the major concern of this Essay is with the processing ot contested claims, it will focus exclusively on those categories, particularly the more troublesome disability claims. [31] A veteran is eligible for compensation payments, even if only imrtially disabled, where be can establish a "disability resulting from personal injury suffered or disease contracted in line of duty in the active military, naval, or air service. . . ." [32] Included within this cate- gory are preexisting injuries aggravated by activity w-hile in the military service. [33] Moreover, the injury or disease need not be combat-related; it is sufficient for the injury to have occurred w-hile serving in any capacity in wartime service. [34] To qualify for compensation under the pension program, a veteran must es- tablish total and permnaneimt disability, as well as an income falling below a lire- scribed level. [35] While such disability is presumed at age 65, a younger vet- eran must actually establish the existence of his incapacity. [36] Similarly, dependents of a deceased veteran may qualify f or coverage under the pension program if they meet the standard of economic need. [37] The VA has a highly decentralized system for processing benefit claims. [38] Under both the disability and pension programs, eligibility determinations are made by local rating boards in the regional offices, applying statutory rating schedules that establish degrees of disability in 10-percent increments, ranging from 10 percent to 100 percent. [39] The rating boards are 3-member panels, consisting of a doctor and either two legal specialists or a legal and a vocational specialist. In determining the merits of a veteran's disability claim, the hoard generally must answer two questions: whether the claimed incapacity is based on a service-connected injury or disease, and what disability rating will be as- signed to the incapacity. [40] A unanimous decision by a rating board is final, and if no grounds for recon- sideration exist, the veteran has a right of appeal to the Board of Veterans Appeals. A nonunanimous decision goes to the regional Chief Adjudication Officer. If he agrees w-ith the majority, the decision, again, is final and appealable at the option of the claimant; but., if the officer sides with the dissent, the decision is `automatically certified to the Board of Veterans Appeals. The Board of Veterans Appeals, located at agency headquarters in Washing- ton, D.C., also sits in 3-member panels. In declining appeals from the rating hoards, the B.V.A. panels have access to specialized assistance, when deemed necessary, from the Chief Medical Director of the VA, or from independent spe- cialists at medical schools. Again, unanimous decisions of B.V.A. panels `are final, hut if a dissent is registered, the Chairman of the B.V.A. must review the case. If he sides w-ith the majority, finality is achieved. Otherwise, he designates an additional panel to consider the case along with the original panel; the majority vote of the enlarged (i-member panel then decides the case, w-ith the Chairman again voting in case of a deadlock. The veteran is entitled to a hearing at 1)0th stages, before the rating hoard and before the B.V.A. In fact, the B.V.A. has traveling panels which hold hear- ings `at many of the regional offices on an annual basis. Whether the veteran par- ticipates in a hearing or not, both the B.V.A. and the rating board are required to reopen the case if the veteran can establish that lie has new evidence to present. And, if an appeal is taken, the rating hoard customarily reconsiders the record before certifying it to the B.V.A. With this capsule view of `the formal process in mind, some central character- istics of the system in action may lie considered. The overwhelming majority of References at end of article. PAGENO="0859" 3479 cases are decided without formal hearings. During 1973, for example, the B.V.A. disposed of 29,825 appeals while holding oniy 971 formal hearings. [41] More than two-thirds of these appeals were denied or dismissed. [42] While no official statistics are available, VA officials suggest that the vast majority of claims de- termined by local rating boards are similarly decided without a hearing. [43] When requested, however, 1)0th the rating boards and the B.V.A. hold hearings. Nonadversarial in nature, with no advocate appearing in opposition to the claimant, the hearings basically are designed to let the ex-serviceman tell his story with the assistance of any witnesses he wishes th present. By regulation the administrators are instructed to grant the claim unless a reasonable doubt exists as to its validity. [44] To make matters more concrete, let us take the case of a hypothetical claimant. Suppose a veteran of the Vietnam War, honorably discharged from active service in 1971, claims disability benefits on the basis of au ulcer initially diagnosed in 1974, but which he firmly believes originated during his period of military service. Accordingly, lie fills out the appropriate forms and applies for dis- ability benefits at his regional VA office. He encloses an examination report and supporting letter from his personal physician, suggesting somewhat equivocally that the ulcer may have originated during the period of military service. By regulation, many chronic diseases, including peptic ulcers, are subject to a 1-year presumption; more specifically, the occurrence of a disease that is at least 10-percent disabling within a year of discharge from the military creates a rebuttable presumption that the ailment is service connected. [45] At the time the claim is filed, the rating board automatically sends for the claimant's armed services health record, w-hich, let us assume, shows no evidence of treat- inent for a coiidition likely to result in an ulcer. He is also sent to a VA hospital for an examination, which similarly provides no positive evidence on the service- connection issue. Since the presumptive period has run, the board informs our hypothetical claimant that his claim is denied. If he has no additional evidence to offer, his iiext step is either to request a hearing or to trigger the appeals process by filing a Notice of Disagreement with the rating board. By this time the claimant is almost certainly aware of the single most dis- tinctive characteristic of the VA process: the availability of assistance from military service organizations. For many years, the major service organizations, including the American Legion, the Veterans of Foreign Wars, Amvets, and a number of other smaller veterans' associations have played an indispensable role in the administration of veterans' claims cases. By congressional charter. these service organizations provide free assistance, through their certified service rej)resentatives, to claimants seeking benefits from the VA. Indeed, only a certified service representative, or an attorney, may represent a veteran before the rating board and the B.V.A. And, since the fee an attorney can collect in a claims case is limited by statute to $10, lawyers have beeii effectively frozen out of the l)rocess. [46] Hence, the disability claimant either represents himself or seeks assistance from a service representative. How-ever, there are real limitations on the claimant's capacity to represent himself. Most importantly, perhaps, he is denied access to his personal file, including his military service health record. Frequently, crucial aspects of the case turn on the veteran's military service record, which includes a complete rundown on every reported health problem experienced by the claimant while in the service. Obviously, such a record is vastly more precise than the claimant's dim recollections based on inexpert personal assessment. By contrast, when authorized by the veteran, a service representative is granted full access to these records. Apart from the problem of access to the records, most claimants are wholly inexperienced at assembling and interpreting medical evidence or arguing a case; the service representative, on the other hand, is a professional. Moreover, the claimant may find it inconvenient to appear before the rating board, and he will almost certainly encounter difficulties in appearing before the B.V.A., par- ticularly if he cannot be placed on its limited local hearing docket. In contrast, the service organizations maintain their offices in VA headquarters and, conse- quently, are available on a routine basis for any required formal appearance in a case. Most critically, the claimant deals with a faceless bureaucracy; the service representative, on the other hand, is linked into an established network of informal contacts w-ifh the administrators. References at end of article. PAGENO="0860" 3480 Let us return now to our serviceman with the peptic ulcer. Probably, either through word-of-mouth or close reading of the application form for compen- sation, he was aware of the service organizations when he filed his claim. In any event, lie is virtually certain to become cognizant of their role prior to a personal appearance-if from no other source, then from the VA officials with whom he deals. Clearly, compelling reasons exist for requesting assistance from a service representative: representation is Pighly professional, free of charge, and imposes no obligations. The chances are that our claimant will forego the opportunity of handling his own case. The service representative's first step is to exhaust all administrative remedies at the local level. These are predominantly informal. An experienced service representative will personally review a case with the rating board pointing out why he thinks they are taking an unreasonably harsh view or suggesting why they ought to gather further information. Most cases are so resolved, through discussion rather than hearing. If the case cannot be satisfactorily concluded, the representative will sug- gest that the claiinaiit file a Notice of Disagreement, thereby triggering his appeal. The rating I)oard will respond with a Statement of the Case, a largely conclusory `statement of its reasons for denial. If the claimant remains unsatis- fied, he files an appeal. The rating board then takes a last look at the case before certifying it to the B.V.A. If the claimant is represented by a service organization with representatives at central VA headquarters, informal negotiations will resume in that forum. Indeed, even before a B.V.A. panel is assigned, the Washington service representa- tive will receive the claimant's file. And, whether the service organization has a national office or not, it is given the opportunity to insert detailed comments in the file, in anticipation of B.V.A. consideration. If the B.V.A. upholds the rating board, the appeals process is exhausted, and judicial review- is unavailable. But perhaps the claimant has received a sufficient amount of attention; perhaps there is no need for further review. It is to that question that we now turn. 13. Time troublesome aspects of preclusion For better or worse, the VA benefit-distribution system represents a significant departure from the prevailing norms of procedural justice incorporated in the common law, adversary model. In most cases, the claimant is confronted with two alternatives, both of which breach the due process model. On the one hand, he can represent himself in a decisionmnaking process in which he has limited *access to relevant information, insubstantial contact with the deciding officials, no discernible adverse party, and no opportunity for judicial review. Or, on the other hand, he can retain a service representative who has virtually unlimited access to data, and absolute freedom to initiate ex parte contacts with the decisionmakers. Let us examine these two alternatives, with primary emphasis on the problem of precluding access to the courts. If a claimant decides to represent himself- a situation that occurs with surprising frequncy [471-one can easily imagine a scenario that makes the absence of judicial review problematic. Putting aside the classic function of review as a check on the possibility of arbitrary official behavior, [48] a real question exists whether the claimant can effectively present his case for decision within the limits of the present system. Lacking access to his army file, with no skills of advocacy, without a clear sense of the value of obtaining additional evidence nor of the interpretation to be given existing, highly specialized informnatiomi, the claimant may be hopelessly inept at present- ing his case. Small comfort derives from the VA's assurances that it sees its mission as providing aid and assistance to veterans. [49] For the agency favorable disposition may be largely irrelevant if the claimant who represents himself must overcome serious handicaps to the effective presentation of his case. Moreover, we need to know considerably more about the entire range of con- straints on the decisionmakers. Rating board and B.V.A. decisions, for example, are subject to a sophisticated internal quality-control review that provides both individualized feedback to operating personnel and information used in the agency's promotion and demotion system. [50] Such constraints can have the effect of limiting the extent to which officials will liberally construe an inade- quate paper record. References at end of article. PAGENO="0861" 3481 It may be objected that the developing line of argument proves too much-that the only effective judicial safeguard against administrative inability to assess fairly the case of an unrepresented claimant is de novo judicial review-and that such a remedy would create an intolerable burden on the federal court. [51] It is beyond the scope of this preliminary analysis to choose between limited and de novo review. Even assuming, however, that de novo review would create an intolerable burden on the judicial system, [521 limited appellate review for "arbitrariness" would arguably have a highly salutory effect, encouraging the agency to establish general procedures that would ensure the construction of a record capable of withstanding the threat of judicial review. But what price judicial review? Would we be opening the door, as both the VA and the service organizations fear, to the requirement of trial-type procedures in contested cases? This conclusion seems unwarranted. One must keep in mind that the critical issues in VA disability cases-service connection and degree of dis- ability-do not rest to any important extent on determinations of credibility. Disputed claims generally involve conflicting inferences in medical reports or inconclusive evidence on occupational capabilities. Thus, a strong argument can be made that "hearings," in the sense of oral testimony or demeanor evidence, should not be woodenly regarded as essential elements of fundamental fairness. If experiences shows that the VA decisionmakers can provide an intelligible rationale for their decisions on the basis of largely written evidence-typically, army medical records, subsequent medical history, and relevant lay testimony- then the courts are highly unlikely to judicialize the agency's procedures. [531 A court would be likely, however, to demand that an equally intelligible and persuasive basis for denial of benefits exist, whether the claimant was repre- sented by a service organization or not. Now, consider the other alternative: the claimant decides to put his case in the hands of a service representative. Would the compulsion to require judicial review still exist in this situation? Again, let us put the everpresent possibility of arbitrary official behavior aside; [54] not on grounds of irrelevance, but to search for reasons specific to the VA system for favoring judicial review. To ascertain those reasons, we must take a closer look at the role of the service organization. As indicated earlier, the service organizations are uniquely bound up in the administrative system. By signing the requisite power of attorney, a client pro- vides his service representative with access to the claimant's army health records and any relevant supporting documents in the file. The established norms, emphasizing interchange, cooperation and mutual support, make it possible for the representative to probe informally the predispositions of the administrators assigned to a particular case, and to attempt to persuade agency officials to see the claimant's case in the most favorable light. Service representatives rather quickly develop expertise in interpreting tech- nical medical records and predicting the behavior of specific administrative officials. They are trained by experienced colleagues and introduced into the fraternity at an early date, where daily encounters with agency officials are the inevitable byproduct of the office-sharing arrangement. In fact, VA officials tend to regard the service representatives as partners inadministering the system. [5~J Arguably, of course, experienced, informality, and mutual trust are indispen- sable attributes of a system designed to handle mass claims in an expeditious manner. Unfortunately, it is just this atmosphere of mutual supportiveness that generates concern over the absence of judicial review. Experience with other decisionmaking systems teaches that where the "advocate" develops loyalty and a sense of obligation to the decisionmaker as well as to his client, role conflict is inevitable. [56] The best interests of the client do not necessarily jibe with the perceived interests of "the system." While the VA appears to be a strongly client-oriented organization, the fact is that in 1973, the B.V.A. alone denied more than 20,000 benefit claims. [57] In other words, the VA is confronted with an impressive number of demands that it regards as unwarranted. And, judging from the reversal rate on appeal, a very substantial number of difficult cases occur that require careful scrutiny. In 1973 alone, rating board decisions were overturned by the B.V.A. in 4,143 cases and remanded for further consideration in an additional 4,928 situations. [58] In total, disagreement arose between the rating boards and the B.V.A. in almosf one out of three cases disposed of on appeal during the year. [59] References at end of article. PAGENO="0862" 3482 The inevitable conclusion is that cases must arise fairly regularly in which the rating board and the service representative honestly disagree on the appro- priate disposition. On a close question of the service-connected origin of a claim, does the veteran's interest sometimes take second place to the service represent- ative's ongoing relationship with VA officials? After all, there will be other battles to fight in the future. Where the extent of disability is at issue, are disagreements compromised by splitting the difference in rating disputes? Where the service representative is satisfied with the proposed resolution of the dispute, how vigorous are his efforts to persuade his client that further contentiousness would be useless? And, do service representatives slacken their continuing ef- forts where claimants are regarded as overly persistent? These are questions that call for empirical answ-ers, rather than mere speculation. But in the absence of a careful study, they raise unsettling issues about the absence of judicial review. [60] Let me reiterate that I am not arguing for de novo review, nor am I suggesting the omniscience of attorneys or courts in ferreting out every instance of potential injustice. It is the deterrent effect of judicial review-its tendency to counter decisionmaking through private accommodation by encouraging a certain degree of arms-length formality-that is the salient characteristic here. The mere ex- istence of a forum for review may indirectly benefit claimants who in fact never proceed beyond the agency, as well as those sufficiently aggrieved to consult a lawyer after exhausting all administrative remedies. The existence of the preclusion statute cannot be explained solely by reference to logical arguments generated by its proponents. The VA and service organiza- tions have strenuously resisted judicial review; but, one suspects, not entirely for disinterested reasons. Like the rest of us, the VA undoubtedly harbors an instinctive distate for the idea of formal supervision. Most administrators, one might guess, would prefer not to have their decisions reviewed, if that option were available. One would suspect that self-interest plays a role in the service organizations resistance to judicial review, as well. Access to the courts is most likely perceive(l as the lawyers' entering wedge into the system, to be followed by formalization of the administrative process at the expense of the service organizations. But it would be a mistake to dismiss the preclusion l)OSitiofl as merely a prod- uct of effective lobbying by groups narrowly pursuing their own self-interest. Its proponents have formulated serious arguments, albeit in conclusory form, that demand refutation by advocates of judicial review. I have already discussed one such argument : that judicial review would inevitably lead to time-consuming and expensive trial-type administrative adjudication. [61] The other major argu- ments focus on the undesirable consequences reviewability would impose on the judicial system itself. First, the VA has argued that judicial review would seriously overburden the courts. The B.V.A. has disposed of approximately 30,000 cases per year over the last decade, a staggering caseload sufficient in the past to dampen congressional enthusiasm for judicial review. In fact, how-ever, about 10,000 of those appeals are reversed or remanded during a typical year; hence, if we assume that judicial review' would not increase the number of appeals to the B.V.A., the potential judicial caseload is reduced to 20,000 per year. [62] While this decrease would not be likely to raise congressional enthusiasm to a high pitch, more refined analysis of the caseload may suggest a further reduction of the potential burden on the courts. It is possible, for example, that virtually all of these cases are appealed only because it is essentially costless to do so. If that is true, correspondingly frivolous judicial appeals would be far less likely to occur for economic reasons. A specialized bar does not exist, nor would the highly decentralized pattern of claims be likely to generate one. In general, dis- ability cases would require attorneys who were able to understand and interpret highly technical medical chronologies. `Furthermore, if review were to be de novo, judicial rules of evidence would require validation of complex medical records 1y expert witnesses. All of these factors add up to a high cost of litigation, with fees dependent upon the successful outcome of the case. 163] Hence, it is far from clear that frustrated litigants w-oulcl overwhelm the courts. [64] Nor is Congress helpless to determine how wide the floodgates are to be opened. As implied above, the choice between de novo review and limited appellate re- view' would impose differential costs on litigants, and consequently influence the size of the appellate docket. Iii addition, it would be I)OSsiblC to circummiscrihe References at end of article. PAGENO="0863" 3483 the caseload by limiting jurisdiction to specific issues-such as service connection in disability cases. In sum, once we have detailed data on the types of cases likely to be appealed, the floodgates can be controlled by careful system design. A second argument made by the VA goes `to the competence rather than the capacity `of the courts. The suggestion is that since benefit controversies tend to involve highly technical issues, turning on conflicting medical interpretations of specific factual circumstances, judicial review would serve no useful purpose. Here the VA position appears to misconceive the role of judicial review. An argument can be `made that the generalist federal district court judge would be severely hampered as a factfinder by lack `of expertise. But the argument merely sets up a straw man; those who advocate de novo review anticipate a specialized court of veterans appeals. If jurisdiction were to be vested in the federal district courts, It would be true appellate jurisdiction-limited in scope, presumably, to reviewing for arbitrariness on the record. And, it is n'ot unusual to provide for appellate review of technical findings of fact; indeed, judicial review of adminis- trative action characteristically requires judges t'o review findings of highly specialized bodies. Finally, one should not be overwhelmed by the notion of expertise in disability and pension determinations. Essentially, the service-connection issue involves establishing an activity-injury nexus similar to that classically encountered in statutory no-fault injury compensation `schemes, as well as in common law tort cases where it appears under t'he rubric "cause in fact." While B.V.A. opinions are `punctuated by highly technical language, the issue is basically whether the disease (or injury) either arose out of or was exacerbated by military service. Presented with somewhat more detailed elaboration of the typical medical reports and supporting findings of fact, as well as a discussion of related past precedents, courts would not face insurmountable dbstacles in determining whether a given decision was arbitrary. [65] III. A TENTATIVE APPRAISAL My bias in favor of Judicial review is undoubtedly apparent. As a general proposition, the constraints and loyalties generated in a bureaucratic system create a potential problem of arbitrariness in the handling of individual cases. Moreover, bureaucratic specialization has its costs as well as its benefits; one who regularly decides hard cases of a certain kind can easily become case- hardened. Hence, `my general `presumption in favor of judicial review. In dealing specifically with the VA, I have f'ocused on those aspects of its claims-processing system that seem to suggest distinctive reasons for concern about the `preclusion of judicial review. Safeguards, however, are costly, and judicial review is no exception. I have tried to indicate the inadequacies of the in terrorem arguments that either the VA or the courts would collapse If judicial review were allowed. But I have re- sponded with a series of questions rather than a set of conclusions. On the existing information about the system, the case for access to court seems strong- sufficiently strong to cast a long shadow over the preclusion statute. The need for a detailed, systematic analysis of the VA claims-processing system is correspond- ingly apparent. REFETtENOES *~B.S. 1960, J.D. 1963, Ph.D. 1967, Northwestern University, Professor of Law, Stanford University. 1. 387 U.S. 136, 140 (1967). 2. See, e.g, Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 410 (1971). 3. See K. DAvIs, ADMINISTRATION LAW eh. 28 (`3d ed. 1972); text accompanying notes 18-19 in~fra. 4. See381IJ.S.C.~211(a) (1970). `5. ADMINISTRATOR OF VETERANS AFFAIRS, 1973 VETERANS ADMINTSTRATION AN- NUAL REPORT 63 (1974) [hereinafter cited as 1973 VA ANNUAL REPORT]. 6. Sce id. at 177. 7. At the end of 1973, there were still more than 500 widows and children of Civil War veterans receiving compensation payments from the VA. See Id. at 65. More importantly, past experience indicates that claims for dis- ability benefits peak a number of years after a war; for example, World War II disability benefit claims reached a high point in 152. See ADMIN- ISTRATITE CONFERENCE STAFF REPORT VA DISABILITY PROCEDURES 5 (1972) PAGENO="0864" 3484 [hereinafter cited as VA DI5ABrnITY PRECEDUImS]. Hence, Vietnam War claims can be expected to increase steadily in the near future. 8. One benefit-distribution system that has been extensively studied, however, is the Aid to Families with Dependent Children (A~DC) program of HEW. ~$ee, e.g., J HANDLER, Tns "DESERVING PooR": A STUDY OF WELFARE An- MINISTRATION (1971) ; Rabin, Implementation of the Cost-of-Living Adjust- ment for AFDC Recipients: A Case ~8tu(ly in We! are idniinist ration, 118 U. PA. L. REV. 1143 (1970). 9. `This is particularly true as we move into an era where a wide variety of social insurance proposals will raise troublesome questions of administra- tive design. If we are to have the benefit of experience in developing new systems for processing `injury and accident claims, we should be evaluating existing schemes such as the VA. 10. 38U.S.C.~211(a) (1970). 11. `For a discussion of the history of the provision, see Davis, Veterans' Benefits, Judicial Review. and the Constitutional Problems of Positive Government, 39 INn, L.J. 183 (1904) ; Note, ~Tndiciai Review and the Government Ne- covery of Veterans' Benefits, 118 U. PA. L. REV. 288 (1969). Extensive hearings on the judicial review- issue can he found in II('arings on ~T1(diCiUi Review of Veterans' Claims Before a Special Subeomm. o'f the House Comm. on Veterans Affairs, 86th Cong., 2d Sess. (1960) & 87th Cong., 2d `Sess. (1962). 12. That court read the earlier statutory language precluding review of "a claim for benefits" as applying solely `to initial claims. Hence, the court allowed review of termination cases. See, e.g., Tracy v. Gleason. 379 F.2d 409 (D.C. Cii'. 1907) ; Wellman v. Whittier, 259 F.2d 103 (`D.C. Cir. 1958). The present language, see text accompanying note 10 supra, precludes re- view' o'f "any question of law or fact" instead of "a claim for benefits" under the VA statute. Thus. termination cases are included w-itli the preclusion ambit. The amendment was adopted in 1970. See 38 TT.S.C. i211(a) (1970). 13. Jolmson ~-. Rohison, 415 11.8. 301 (1974), discussed in text accompanying notes' 15-16 infra. 14. Congress initially provided a specific preclusion `of judicial review in 1887 for pension cases arising under the Tucker Act. See Hearinqs on Judicial Review of Veteran's Claims Before a kS'peeiai kS'ubeonl~ni. of the House Comm. on Veteran's Affairs, 86th Cong., 2d Sess., at 2595 (1960). 15. 415 ITS. 301 (1074). 10. 1(1., citing ~ quoting Rohison v. Johnson, 352 F. Supp. 848. 853 (D. Mass. 1973). 17. Disability benefits are payable only in cases where the veteran establishes that the injury or disease either rose out of or was exacerbated by military service. See 38 U.S.C. § 331 (1970). 18. The Administrative Procedure Act § 10, `5 U.S.C. § 701 (a) (1970) provides: "This chapter [on judicial review-] applies . . . except to the extent that- (1) statutes preclude judicial review; or (2) agency action is committed to agency discretion by law-." The "committed to agency discretion" pro- visi'on is discussed at length in Saferstein, Non-reviewabil'ity: A Functional Analysis of "Committed to Agency Discretion," 82 HARv. L. REV. 367 (1968). It is outside th'is scope of this Essay. 19. However, there has been no concrete opportunity to raise an analogous pre- clusion question with respect. to other benefit-distribution schemes since judicial review has never been explicitly eliminated. For a details analysis of one such administrative system, see Dixon. The Welfare State and Mass Justice: A TVarning from the Social Security Disability Program, 1972 DUKE L.J. 681. 20. There is strong judicial support for the "flexible" concept of due process. See Goldberg v. Kelly, 397 ITS. 254 (1970). Perhaps the leading recent case on procedural due process, Goldberg held that a trial-type administra- tive hearing w'as required prior to termination of AFD'C benefits. But the Court clearly stated that its conclusions were based on a balancing of the costs of such a hearing against the benefits. Id. at 256. In fact, in Arnett i-. Kennedy, 94 5. Ct. 1633 (`1974). six of the Justices split evenly on hOw' the Goldberg balancing test should apply to the dismissal of a federal employee who alleged inadequate procedural protections; as a con- PAGENO="0865" 3485 sequence, the employee's dismissal without a trial-type hearing w-as upheld (the three remaining Justices regarded Goldberg as inapplicable and con- sequently considered the asserted due process concerns as unwarranted). Of course, these and similar administrative hearings cases do not involve the access-to-court principle, w-hich could be regarded as a more funda- mental aspect of due process. But the virtually infinite diversity of admin- istrative systems makes it highly unlikely that the Court would be so 1)01(1 as to announce an absolute due process bar to preclusion of judicial review. Most critically, one must be cognizant of *the fact that there is no magic to the terms "court' and "agency.' From a due process perspective, an "agency" process could be established that afforded most of the proce- dural safeguards that we traditionally associate w-ith a "court." In other words, at some point the internal administrative procedural safeguards may be sufficient, when measured against the additional costs of compelling judicial review, to satisfy due process requirements without access to court. Because we strongly identify the Rule of Law with access to court, I would expect the Court to entertain a very strong presumption, on due process grounds, in favor of access; nevertheless, I would not foreclose the possibility that the presumption could he rebutted. In the few in- stances where Congress has enacted somewhat w-eaker versions of a pre- clusion statute, the Court has strained to avoid a direct confrontation on the question w-hether judicial review is constitutionally compelled. Thus, iii Estep v. TJnited States, 327 TJ.S. 114 (1946), the Court interpreted the language in the Selective Service and Training Act of 1940, making draft hoard determinations "final," to create only administrative finality. See 0180 Shaughnessy v. Pedreno, 349 TJ.S. 48 (1955), affording similar treat- ment to the administrative finality provision in the Immigration and Nationality Act of 1952. The most comprehensive examination of the con- stitional right to judicial review is Hart, Time Power of Con gress to Limit time Jurisdiction~ of Federal Courts: An Ea~ercise in Dialectic, 66 HARv. Ti. REV. 1362 (1953), discussing the circumstances in w-hich article III, § 1, as well as the due process clause, might be taken to compel judicial review. 21. Sec note 20 supra. In the next Part, I attempt to identif,v with some precision the major questions that a comprehensive analysis of the VA would be ol)liged `to consider. 22. 410 U.S. 656 (1913). 23. Boddie v. Connecticut, 401 U.S. 371 (1971). 24. Id. at 659. The Supreme Court's reluctance to extend procedural due process beyond its existing limits in welfare-type cases is demonstrated in a series of recent decisions involving the right to a pretermination agency hearing. The Court has carefully avoided extending the procedural safeguards granted to AFDC recipients in Goldberg v. Kelly. 397 U.S. 254 (1970), to either Social Security disability recipients or unemployment compensation recipients. See Torres v. New York Dept of Labor. 410 U.S. 971 (1973) Indiana Employment Security Div. v. Birney, 409 U.S. 540 (1073) ; Richard- son v. Wright. 405 TJ.S. 208 (1972). See generally Meyerhoff & Mishkin, .4pplieation. of Goldberg v. Kelly Ilearinq Requirements to Termination of Social Security Benefits, 26 STAN. T~. REV. 549 (1974). 25. In essence, the Court is saying that welfare payments are a gratuity, since its holding is predicated upon the notion that the recipient takes the bene- fits subject to limiting conditions attached by the state which do not attach to more "fundamental" types of interests. That distinction w-ould be especially embarrassing in the veterans' benefits context, since the VA has made a sustained effort to educate it's various constituencies to regard veterans' benefits as an entitlement rather than a form of charity-a "right" earned by service to the nation in a critical calling. See, e.g.. G. STEINER, THE STATE OF WELFARE 275 (1971). For a discussion of the rights- privileges distinction and a systematic argument regarding the injustice it has fostered, see Reich. Time New Property, 73 YALE L.J. 733 (1964). 26. 410 U.S. at 660 (citations omitted). 27. The dissents are quick to make this point. See Id. at 662 (Douglas, J., dis- senting) ; Id. at 665 (Marshall, J., dissenting). 28. St. Joseph Stock Yards Co. v. United States, 298 U.S. 38, 84 (1936) (con- curring opinion), 29. See note 20 supra. 78-226 0 - 77 - 55 (Pt.4) PAGENO="0866" 3486 30. It is estimated that 80% of the cases appealed to the Board of Veterans Appeals fall into these two categories. See VA DISABILITY PROCEI)URES, supra note 7, at 26. The VA also administers a variety of housing, educa- tional, and insurance programs that provide assistance to veterans. 31. Steiner estimates that about one-sixth of the appeals to the Board of Veterans Appeals involve pension claims. See G. STEINER, supra note 25, at 276. Another researcher has estimated that while 80-90% of the pension claims are granted, only 40% of the disability claims are honored. VA DI5ABILITT PROCEDURES, supra note 7, at 25. 32. 38 U.S.C. § 331 (1970). 33. Id. § 353. 34. Disabilities incurred during peacetime service are also compensable, but a~ 80% of the amount that would be awarded for w-artime service. Id. §~ 331. 334. 35. Id. § 521. 36. Id. § 502. 37. Id. §~ 541-43. 38. The following (lescription of the system is based on information gathered in interview-s conducted w-ith VA administrative personnel, and on data gathered by the staff of the Administrative Conference of the United States. I would like to express my appreciation to the Conference for mak- ing available to inc two imiternal staff reports prepared for the Conference, VA DIsAmLITY PROCEDURES, supra note 7, and ADMINISTRATIvE CONFERENCE STAFF REPORT; JUoIcIAL REVIEW OF BENEFIT DETERMINATIONS IN TIlE SOCIAL SECURITY AN!) VETERANS ADMINISTRATION (1970). The conclusions reached in this Essay are my ow-n, and should not be attributed in any sense to the Administrative Conference of the United States. 39. The rating schedules provide a highly detailed breakdow-n of injuries and diseases, based on experimental data collected by the VA. Disability rat- lags are scheduled on an objective scale, e.g., "average impairment in earning capacity," rather than by individualized subjective standards. See 38 C.F.R. cli. 1, pt. 4 (1972). To provide some idea of the complexity of the schedule, consider the following ratings breakdow-n of bronchial dis- eases, reported at Id. § 4.97: "Bronchitis, chronic. Severe; with dyspnea at rest or on. slight exertion and considerable emphysema, 60. Moderately severe; persistent cough at intervals throughout the day, considerable expectoration, considerable dyspnea on exercise, rales throughout chest, beginning emphysema, 30. Moderate; considerable night or morning cough, slight dyspñea on exercise, scattered bilateral rales, 10. Mild; slight cough, no dyspnea, few- rales, 0. Bronehiectasis. Pronounced; symptoms in aggra- vated form, marked emphysema. dyspnea at rest or on slight exertion, cya- nosis. marked loss of weight or other evidence of severe impairment of general health. 100. Severe; w-ith considerable emphysema, impairment in general health manifested by loss of w-eight, enemia, or occasional pul- monary hemorrhages; occasional exacerl)ations of a few- days duration, w-ith fever, etc., are to be expected; demonstrated by lipiodol injection and layer sputum test, 60. Moderate; persistent paroxysmal cough at inter- vals throughout the day, abundant purulent and fetid expectoration, slight. if any, emphysema or loss of weight, 30. Mild; paroxysmal courh, mostly night or. morning purulent expectoration, 10. Asthma., bronchial. Pro- nounced; marked emphysema, attacks very frequent, dyspnea on slight exertion, betw-een attacks, marked loss of weight or other evidence of severe impairment of general health, 100. Severe; moderate emphysema, frequent attacks (one or more weekly). marked dyspnea on exertion hetw-een attacks. impairment in general health manifested by malnutri- tion. etc., 60. Moderate: slight to moderate emphysema, attacks rather frequent (10-14 day intervals), moderate dyspnea on exertion between attacks, 30. Mild; w-ithout emphysema, and occurring at w-idely separate intervals. 10. Emphysema. No separate rating; covered by basic condition." 40. The issues in pension cases are somewhat different. In that category. service connection ordinarily need not be established. However, where the claimant is the survivor of a veteran, establishing service connection results in a higher pension, so the issue is sometinies critical. Pension cases involving survivors also can raise a variety of legal-survivor-status questions that do not arise in disability cases. PAGENO="0867" 3487 41. 1973 VA ANNUAL REPORT, supra note 5, at 99. Roughly one-third of the appeals were heard in the regional offices by traveling sections of the B.V.A. 42. Id. 43. VA DISABILITY PROCEDURES, supra note 7, at 99. 44. 38 C.F.R. § 3.102 (1972). 45. Id. § 3307(a) (3). 46. Less than 2% of the claimants appealing to the B.V.A. in 1973 were repre- sented by an attorney. 1973 VA Annual Report, supra note 5, at 99. 47. Of the claimants who appealed to the B.V.A. in 1973, 22% represented them- selves. Id. Almost certainly, an even higher percentage of cases dropped prior to appeal involve self-representation. 48. This function will be deemphasized only because the possibility of an arbitrary official decision-'i.e., one not based on rational inferences drawn from the facts of the case-is common to all administrative sys- tems. Rather than downplaying the role of judicial review generally as a safeguard against such arbitrariness, I seek to highlight specifically troublesome aspects of precluding review in the VA context. 49. Agencies making determinations of entitlement do not have a history, by and large, of playing the role of advocate for their client groups: witness the HEW welfare bureaucracy and the Selective Service System. For a discussion of these respective agencies, see Rabin, Implementation of the Cost-of-Living Adjustment for AFDC Recipients: A Case Study in Welfare Administration, 188 U. PA. L. REV. 1143 (1970) ; Rabin, Do You Believe in a Supreme Being: The Administratjoi~ of the Conscie~tfon~ Objector Ewemption, 1967 Wis. L. REV. 642. It has been forcefully argued, however, that the VA perceives its mission primarily as a service organization for veterans, including those s~e1dng benefits. See C. STEINER, supra note 25, at 275-76. 50. For a description of the VA internal audit system, see Mashaw. The Manage- ment Side of Due Process, 59 CORNWELL, L. REV. 772 (1974). 51. Lay testimony might be relevant on issues of employability or overt path- ological behavior, for example. 52. But it is questionable whether such an overload would in fact occur. See text accompanying notes 61-64 infra. 53. Other mass disability and status determination systems have long operated with informal nonadversary decisionmaking processes, and have success- fully withstood due process attacks in the courts. Examples include: Social Security disability determinations, Immigration and Naturalization Serv- ice change-of-status determinations, and Selective Service System classifi- cation changes. Indeed, the Supreme Court has reiterated in a number of recent decisions its intension to treat procedural due process as a flexible concept when measuring the adequacy of specific administrative hearing procedures. See, e.g., Richardson v. Wright, 405 U.S. 208 (1972) Richardson v. Perales, 402 11.5. 389 (1971). 54. See note 48 supra. 55. See G. STEINER, supra note 25, at 277-79. 56. The most frequently cited example is plea-bargaining practice in the criminal justice in the criminal justice system. For a particular harsh view of the practice from a sociological perspective, see Blumberg. The Practice of Law as Confidence Game: Organization Cooperation of a Profession, i LAw & Soc'T REV. 15 (1967). On the prosecutor's role constraints, see Rabin, Agency Criminal Referrals in the Federal System: An Empirical Study of Prosecutorial Discretion, 24 STAN L. REV. 1086 (1972). 57. See 1973 VA ANNUAL REPORT, supra note 5, at 99. 58. Id. 59. The B.V.A. disposed of a total caseload of 29.825 during 1973. A substantial number of appeals are closed by recommendation of the rating board prior to certification of the case to the B.V.A. In 1973, 9,803 cases were so decided. Id. 60. Moreover, I may be grossly oversimplifying the client-representative rela- *tionship by suggesting a twofold categorization of claimants, comprising those who seek representation and those who do not. In fact, it seems quite likely that substantial groups of veterans find the two alternatives almost equally disagreeable and almost randomly opt for one or the other. Intuitively, for example, one would suppose that a "new breed" of service- man coming out of the Vietnam War would be less disposed than their PAGENO="0868" 3488 fathers or older brothers to be represented by the traditional service organizations. While those organizations have no membership prereq- uisites-indeed some, like the American Red Cross, are not exclusively veterans organizations-they do possess a longstanding politico-cultural identification that creates a reluctant client-representative relationship, at best. Similarly, one wonders how frequently black and other minority veterans-who constitute an extremely small percentage of service organi- zation membership-seek representation, and whether background and cultural variables affect the nature of the relationship in these cases. 61. Sec text accompanying notes 51-53 supra. 62. 1973 VA ANNUAL REPORT, supra note 5, at 99. 63. The treatment of attorneys' fees raises distinctive issues. For an example of a statutory resolution of the problem, see 42 U.S.C. § 406(b) (2) (1970) (attorneys' fees in Social Security disability cases). Obviously, an alter- native to statutory treatment would be to let the market work out its own resolution of the issue. 64. A further refinement in analysis would take into account the real possibility that systematic differences exist in the likelihood of appeal, depending ~on the issues in controversy. For example, degree-of-disability cases fre- quently tend to involve relatively slight differences of opinion-and corre- spondingly limited dollar amounts in controversy-over the proper inter- pretation of the ratings schedule. See note 39 supra. On the other hand, service connection is an all-or-nothing issue; if the claimant fails to estab- lish the required nexus, he receives no benefits. Correspondingly, the differing inferences drawn by the parties are more sharply defined in the latter situation. Hence, even assuming nonfrivolous administrative ap- peals, service-connection cases may be more likely to reach the courts than degree-of-disability cases. 65. Neither rating boards nor the B.V.A. adheres to a system of precedent. Opinions are not published and they are not generally circulated. The VA takes the position that every case is unique and must be decided on its own facts. If judicial review were instituted, the VA practice would un- doubtedly be attacked in court. Thus, we encounter another set of questions on the agenda for empirical research: to what extent do the agency files indicate that generalized types of cases arise, and to what extent are those cases, in fact, decided in a similar fashion? UP AMENDMENT NO. 525 Mr. FIARTKE. Mr. President. I send two amendinent.s to the desk, one a joint amendment froni Senators Griffin and Abourezk, and one on behalf of Senator Durkin. Both have been cleared on 1)0th sides of the aisle. Mr. ROBERT C. BYRD. Mr. President. I hesitate to move from this desk, but I have to so that Senator Magmison and others may see the Presiding Officer. My aides will have to come a little closer. The PREsIDING OFFICER. The first amendment will be stated. The legislative clerk read as follows: The Senator from Indiana (Mr. Hartke). on behalf of Mr. Griffin and Mr. Abourezk, proposes an unprinted amendment No. 525. The amendment is as follows: On page 11, line 24, insert the following: After the word `course" insert "or any course as set forth in clause ((3) of Section 1789(h) of this title". On page 12. line 5 strike all after the word "subsection" through the word `Welfare" on line 7 of page 12, and substitute therefor the words "in whole or in part". On page 12, line 8, strike the last word "the". On page 12, line 9, strike "eligible veteran" and substitute "eligible veterans and the government". On page 46, strike out lines 11 and 12 and insert in lieu thereof the following: "is amended- (1) by striking "or" at the end of clause (4) in subsection (h) (2) by striking out the period in the end clause (5) in subsection (h) and inserting in lieu thereof "; or". (3) by adding at the end of subsection (b) a new clause (b) to read as follows: "((3) any course offered by an educational institution under a contract with the Department of T)efense that (A) is given on, or immediately adjacent to, a PAGENO="0869" 3489 military base; (B) is available only to active duty military personnel and/or their dependents and (C) has been approved by the State Approving Agency of the state in which the base is located", and (4) by adding at the end thereof a new subsection (c) as follows: Mr. HARTKE. Mr. President, the first amendment is offered by the acting minority leader, Mr. Griffin, and by the junior Senator from South 1)akota (Mr. Abourezk) and would modify the amendments the committee adopted with respect to the 85/15 rule. I would hope that my acceptance of this amendment is not construed as a comment on the wisdom of the committee's original action. It is late in the evening and it is necessary to make small changes in the bill as reported in order to assure that the overall improvements contemplated by the reported hill will come to pass. I believe that the committee amendments with respect to this proposed regulatory provision are sound in concept. This is not to say some modification would not be in order. Thus, I am prepared to accept the amendment. However, I wish this body to know that the committee will con- timiue to scrutinize the operation of the veterans education program to include the close examination and evaluation of all educational institutions who have large numbers of veterans among their students. The PRESIDING OFFICER. The question is on agreeing to the amendment. The amendment was agreed t:o. UP AMENI)MENT NO. 526 The PRESIDING OFFIcER. The second amendnient will be stated. The legislative clerk read as follows: The Senator from New Hampshire (Mr. Durkin) proposes an unprinted amend- ment No. 526. The amnendnment is as follows: At the appropriate place insert the following new section: SECTION 214. (a) Section 1662(a) of title 38. United States Code, is amended by inserting "(1)" after "(a)" and by adding at the end of such section a new l)aragraph as follows: (2) Notwithstanding the provisions of paragraph (1), any veteran shall be l)ermitted to use any of such veterans unused educational entitlement under this chapter after the delimiting date otherwise applicable to such veteran, as provided in paragraph (1). if such veteran was enrolled as a full-time student an(l l)ursui"g an approved course of educatioii at the time of `the expiration of such veteran's ehgibilitv, or if such veteran was a part-time student at the time of the expiration `of such veterans eligibility and was receiving educational benefits, a loan, or conipensation under any program provided for in the Omnibus Crime Control and Safe Streets Act of 1968. Notwithstanding any other provision of this chapter 36 of this title, any veteran whose delimiting period is extended under this paragraph- "(I) may continue to use any unused entitlement under this chapter until such entitlement is exhausted, until the expiration of three years, or until the veteran has completed the approved course of education in which the veteran was en- rolled at the end of the delimiting period referred to in paragraph (1), which- ever occurs first; "(ii) must pursue a program of education on a full-time basis unless such veteran is receiving educational benefits, a loan or compensation under a pro- gram provided for in the Omnibus Crime Control and Safe Streets Act of 1968; and "(iii) shall be entitled to an educational assistance allowance equal to one- half the. educational assistance allowance authorized for eligible veterans whose delimiting period has not expired or been extended by this paragraph.". (b) The amendment made by subsection (a) of this section shall become effec- tive upon the date of enactment of this Act, and apply to all veterans released from active duty after January 31, 1955. Mr. HARTKE. Mr. President, the second amendment I offer on behalf of the junior Senator from New Hampshire (Mr. Durkin). The amendment is similar to the amendment originally offered by myself, Mr. Stafford, the ranking mi- nority member of the Subcommittee of Readjustment, Education, and Employ- ment, together with Chairman Muskie of the Budget Comnmittee on Senator Behlmon, the ranking Republican of that committee. In this connection, I ask unanimous consent that the colleague letter which we recently sent out be in- serted in the Record at this point. There being no objection, it was ordered printed as follows: PAGENO="0870" 3490 SEPTEMBER 27, 1976. DEAR COLLEAGUE: During consideration of S. 969, the Veterans' Education and Employment Assistance Act of 1976, we plan to offer an amendment to permit a modified extension of the period of time following discharge or release from active duty during which a veteran can utilize GI bill benefits-the socalled "delimiting period." As you are probably aware, commencing on May 31 of this year, all Post-Korean and some Vietnam era veterans lost eligibility for GI bill benefits as a result of the passage of the 10-year delimiting period. With each succeeding day, addi- tional veterans are affected by the delimiting date. Many of these veterans, par- ticularly Post-Korean veterans, did not initiate a program of education until recently and, thus, were unable to complete their studies within the 10-year period. This loss of VA educational benefits may prevent some of these veterans from completing their courses of study. To ease the impact of the expiration of the delimiting period, our amendment w-ould allow veterans w-ho were enrolled in full-time training during their tenth and final year of GI bill eligibility up to an additional 2 years of eligibility or until the veteran has attained his educational objective, whichever is sooner. During the eleventh year, an eligible veteran would he entitled to henfits at half the rate of the monthly educational assistance allowance authorized for eligible veterans whose regular delimiting period has not expired. During the twelfth year, if needed, a veteran would be entitled to benefits at one-third the rate of the regular monthly assistance allowance. These veterans would also continue to be eligible for VA direct education loans up to $2,000 a school year under title 38, United States Code, § 1789, during their eleventh and twelfth years. The amendment we propose to offer would, according to the Congressional Budget Office, have a fiscal year 1977 outlay of $224.3 million, decreasing to ap proximately $100 million in fiscal year 1981. Unlike other amendments being pro- posed to S. 969, this amendment would assure that the $19.5 billion outlay limit established by Congress in both the First and Second Concurrent Resolutions for veterans' benefits and services would not be exceeded. Thus, our amendment is designed to afford assistance to those who have not completed their studies within the normal 10-year period while assuring that Con- gress keeps outlays within the Congressional budget limits it established for the veterans' function. If you have any questions or would like to be a cosponsor of this amendment, please feel free to call Guy McMichael or Jack Wickes at 224-9126. Sincerely, VANCE HARTKE, Chairman, Committee on Veterans' Affairs. EDMUND S. Mu5KIE, Chairman, Committee on the Budget. ALAN CRANSTON, ROBERT STAFFORD, Ranking Minority Member, Subcommittee on Readjustment, Education and Employment. HENRY BELLMeN, Ranking Minority Member, Committee on the Budget. WILLIAM ROTH. Mr. HARTKE. Mr. President, I want to commend the Senator from New Hamp- shire for his persistence and tenacity in directing our attention to the problems faced by those veterans whose 10-year delimiting date has expired. As I have said before on this floor, I believe there is merit in extending the delimiting period. The problems which we previously faced, however, have been a result of the lack of sufficient funds allocated for function 700 in both the first and second con- current resolution which could be utilized for this purpose. Based on recent downward reestimates of readjustment assistance benefits appropriated and needed for fiscal year 1977, it would appear that the amendment offered b~ the Senator from New Hampshire could now l)e accommodated within the limits set forth in the second concurrent resolution on the budget. I should note how- ever, that the House of Representatives has somewhat different rules with re- spect to reallocating moneys from existing program appropriations to new pro- gram outlays. Thus, whether they will be in a position to act as we are doing today is open to serious question. Also, because opposition to this amendment remains strong in many quarters, I would be less than candid if I failed ~o ac- PAGENO="0871" 3491 knowledge that the brief amount of time remaining before we adjourn requires, on the part of all, a liberal amount of give and take in order to assure that we can reach a consensus agreement quickly. So that there may be no question as to my past and current position with respect to the extension of the delimiting period, I ask unanimous consent that a statement I made earlier this year be inserted in the Record at this point. There being no objection, the material is ordered printed as follows: GI BILL EXTENSION: SUBSTANTIVE ARGUMENTS AND BUDGETARY REALITIES Mr. President, on May 31, 1970, for the first time since the current GI bill pro-. gram was initiated in 1960, veterans who served between 1955 and 1960, ap- proximately 3.7 million, had their eligibility for educational benefits expire. Of this number 563,000 were enrolled in a program of education and were receiving VA benefits. Under existing law veterans have a 10-year period following dis- charge to utilize readjustment assistance benefits earned in military service. Many of my colleagues have contacted me recently urging that the time iieriod-known as the "delimiting period" in VA parlance-be extended either for a year, 2 years or for an unrestricted period of time. While there is consider- able merit to some of the arguments supporting an extension of the time period I must be candid with my colleagues. Such a general extension of the delimiting period is highly unlikely because of a lack of support or active opposition from some quarters and because insufficient funds have been allocated to veterans' benefits and services in the fiscal year 1977 concurrent resolution on the budget recently adopted by Congress. A brief examination of the background of this I)roblefli is instructive. GI bill l)enefits have been generally regarded as a readjustment assistance benefit to veterans w-hich facilitated transition from military to civilian life. Consistent with the attitude that such readjustment should occur and benefits be utilized within a reasonable period of time following release from military service, the WW II, Koreaa conflict, and the present GI bill all have had statutory delimit- lag periods. Most World War II veterans had 4 years from the date they were seI)arate(.T from service to begin a program of education and 9 years or until July 25, 1956 to use their entitlement. Korean veterans had 3 years following separation froni service to begin a program of education or training and 8 years from separation from service or until January 31, 1965 to use their entitle- inent. TJnder the law creating the current program (P.L. 89-358), veterans dis- charged after January 31, 1955-the date the Korean conflict officially ended- were allowed 8 years from June 1, 1966 or 8 years from date of discharge or lease, whichever was later, to complete their program of education. Under their counterparts in World `War II and the Korean conflict no time limitation was imposed on the post-January 31, 1955 veterans for beginning their training. In 1974, 1 sponsored legislation to extend this training period from 8 to 10 years. Despite administration opposition this was signed into law (P.L. 93-337) by then President Nixon. There were two principal justifications for this ex- tension. First, Congress recognized unique circumstances differentiating these veterans from earlier World `War II and Korean conflict GI bill trainees. Second. I believe Congress acknowledged a broadening concept of how and when CI bill benefits might he utilized to the advantage of the veteran and the Nation a.s a w-hole. In the first instance, eligibilit.y for benefits for the 3.7 million post- Korean veteraiis, who served between 1955 and 1966 occurred retroactively in 1966. Thus veterans, who were not eligible for the GI bill upon their release from military service some as long ago as ten years previously were suddenly made retroactively eligible for CI bill benefits. None of these veterans received individual notification from the Government of their eligibility and many were thus not aware of the program. Initially, benefit.s were lower than the Korean conflict rates some 15 years earlier. The low l)enefit level, coupled with the fact that many veterans had taken jobs and started families, made it difficult for them to use their benefits. It w-as only following substantial benefit rate in- creases in 1972 amid the initiation of active outreach by eligible schools that many of these veterans decided to enroll under the GI bill. Mans- veterans also discovered their need for retraining or that their initial education was insufficient for them to make significant career advancement which illustrates the second factor mentioned. Tw-o years later in 1974, con- gressional recognition of these factors led to enactment of an extension of the PAGENO="0872" 3492 delimiting period to 10 years from May 31, 1966 or date of discharge, which- ever was later. Shortly after enactment of Public Law 93-337, as part of Presi- dent Ford's initial budget, the administration submitted proposals in January 1975 to repeal the extension and revert to an 8-year delimiting period. This request was repeated this past January and the President's budget for fiscal year 1977 assumes enactment of legislation w-hich be estimates w-ould reduce first-year expenditures in excess of $600 million. The Subcommittee on Readjustment Education and Employment, which I chair, held a hearing last October which covered this and other subjects of con- cern to veterans. Argument both in favor and against extension of the delimit- lug period were advanced to the committee. Proponents noted first, the particular circumstances facing the immediate groups of veterans facing the cutoff on May 31, 1976; second, the need for up- grading or retaining of skills in an ailing economy; and third, the profitable return to the Treasury of additional taxes which have traditionally resulted from GI bill expenditures. Opponents argued that 10 years is a sufficient period of time to "readjust" and suggested that much of the training was either avocational in nature or entered into by veterans more interested in obtaining an income supplement to their regular employment check rather than obtaining an education. For exem- pie, by offering training in the evening or weekends, one business school in recent years has increased veteran enrollment from under 100 to over 7,000 GI trainees currently enrolled. In addition to the various arguments advanced pro and con, an implicit con- sideration, particularly for those impressed with the need for fiscal restraint, was the cost of any extension. A simple 2-year extension would result in the additional mandatory expenditures of $2 billion. A 1-year extension only is estimated to cost $681 million. While it is my present judgment, based on the testimony received, that the weight of the arguments favor some form of extension, it is also clear that this view is not unanimous. The President's opposition remains firm and he could be expected to veto any extension just as he vetoed the 1974 GI bill. A House of Representatives vote on a floor amendment to the first concurrent resolution- widely regarded as a vote to add extension money to this year's budget-in- dicates that probably well over a third of its members there would be available to sustain a Presidential veto. The Nation's three largest veterans' organiza- tions, the American Legion, the Veterans of Foreign Wars, and the Disabled American Veterans, do not support an extension for a combination of reasons, principally because of the belief that limited funds for veterans' programs re- quires distribution to higher priorities. Mr. President, irrespective of the merits of an extension proposal, the avail- ability of funds is *a crucial issue for a Hou.se and Senate now object to the Congressional Budget Act. I believe my colleagues should clearly understand that there is a direct relationship between their votes on spending ceilings for various programs and our ability to pass and enact legislation such as extension proposals. Frankly, I have been amazed in recent weeks by the number of my colleagues-including members of the Budget Committee-who, having voted for the ceiling on veterans' benefits and services, which was $1.1 billion below the Veterans' Affairs Committee's recommendation, now urge the committee to report and pass legislation for which there are insufficient funds. In this connection it would also be useful to briefly review the steps that have been taken as part of the congressional budget process so far this year. As required by law, on March 15, 1976, I, as chairman of the Committee on Veterans Affairs, wrote the Budget Committee recommending fiscal year 1977 outlays of approximately $20.4 billion for veterans' benefits and services. While this figure did not include all that I believe was meritorious or desirable, it was a figure which attempted to balance the Budget Committee's expressed concern for fiscal restrain with our intention to provide sufficient moneys to fund actual cost- of-living increases for various benefits programs, to fund legislative initiatives which had passed one house or the other and to provide for more adequate health care. In this connection, gi~en the President's strong position against extension of the GI bill, no additional explicit moneys were sought for GI bill extension. Had the $20.4 billion been granted, however, there would have been sufficient funds to grant some form of an extension by trading off-~--as contemplated by the congressional budget process-granting something' loss than full cost-of- living increases to GI bill recipients had, that been the clear ~vill of Congress. PAGENO="0873" 3493 At first glance the $20.4 billion recommended figure appears to be a sub- stantial increase over the President's budget of $17.2 billion. It was and is immediately apparent, however, that the President's budget is more of the traditional shell game practiced in recent years. Mandatory program expendi- tures were understated, health care needs were underestimated, and the Presi- dent's budget assumed enactment of so-called cost saving legislation of very dubious merit much of which had been consistently rejected by Congress in the past. For example, mandatory GI bill expenditures were understated by over $600 million on the assumption by the President that Congress would reduce the GI bill training period from 10 to 8 years. Second, in addition to intentionally understated costs, the President's budget ignored the need for cost-of-living increases in various veterans benefits pro- grams. Seventy-two percent of the VA budget represents transfer payments and certain benefits programs, such as the GI bill, have not received cost-of-living increases since September 1974. Finally, recommended VA outlays as a percentage of the Federal budget were modest when compared to past budgets and represent a long-term decline over the last 20 years. A comparison between the current fiscal year with fiscal year 1956, 20 years earlier, reveals, for example, that while veterans population has increased by 39 percent, veterans' benefits and outlays as a share of the Federal budget has decreased by 28 percent. And this decline occurred during a period of prolonged conflict which produced many new veterans with the need for temporary but higher cost readjustment benefits. Reasonable mep can disagree of course, and the Budget Committee decided to set veteran outlays at $19.3 billion, or $1.1 less than the Veterans' Affair Committee recommended. The Budget Committee's recommendation was upheld by the full Senate when an amendment sponsored by Senator Cranston, myself and others to add back $800 million was tabled by a vote of 53 to 21. Sub- sequently, the House of Representatives adopted a veterans' benefits and services outlay target of nearly $20 billion-a level which would have allowed our committee greater latitude. In large part, the difference between the Senate adopted and the House adopted veteran benefit outlays was prompted by concern expressed on the House floor that there be additional funds which could be utilized for extension of the GI bill training period if such legislation were enacted. However, this figure was not upheld in House-Senate conference and was reduced to $19.5 billion, the target assigned in the first concurrent resolu- tion on the budget. i~fr. President, it was my opinion then as now that the $19.5 billion figure is insufficient to provide full cost-of-living increases for all veterans' benefits pro- grams and to enact legislative initiatives which have passed previously in one house or the other such as pension reform, or the removal of the 9-month under- graduate restriction. The Budget Committee's "current ~rvices" approach would allow cost-of-living increases for a 1-year period only despite the fact that many veterans' benefits programs have not been increased for periods longer than 1 year. Nevertheless, we are prepared to attempt to live within the expressed will of Congress that expenditures be held to $19.5 billion. What disturbs me is the attitude of some of my colleagues who, having voted to keep expenditures at that level, now believe that they can recommend the Veterans' Affairs Committee report any and all legislation which obviously cannot be accommodated within those budget totals. One of the arguments advanced by proponents during initial consideration of the Congressional Budget Act was that while members often agreed that Fed- eral spending should be kept at a certain level they turned around and voted for a variety of programs which when totaled up clearly exceeded the agreed upon limits. This was criticized l)y Budget Act proponents as lacking candor at best or being irresponsible at worst. While I believe it it is yet to be demonstrated that Federal spending is excessive I recognize that there is merit in a process which allows us to decide first what overall spending should be, and second determine our priorities within those levels. Two things about the actual opera- tion of this process, however, disturb me. The first is the apparent abdication of these decisions by the full Senate to the Budget Committee itself. In the debate on the amendment to add money for vet- erans' benefits and services this year, little attention was directed as to whether uriorities should be reordered, or whether overall Federal spending should be increased. Rather, opponents argued that to suggest something other than what the Budget Committee itself had recommended was somehow an attack on the PAGENO="0874" 3494 very congressional budget process itself. Naturally, I do not share this view nor am I prepared to concede that the Budget Coinniittee's composition or decisions are a completely accurate reflection of the attitudes and priorities of the full Senate itself. Nevertheless, each of my colleagues must decide for himself how much and to what extent he will exercise his own judgment or defer to others. What troubles me, however, is the apparent inability of some of my colleagues to see any con- nectioii between their vote on spending levels and the authorizing committee's ability to report and enact legislation. Could it be that a new irresponsibility has replaced that which was criticized when the budget act was initially con- sidered? Under this new irresponsibility some members apparently believe they can vote to hold veteran expenditures dow'n-in this case $1.1 billion below committee recommendations-and then turn around and urge the same com- mittee to enact new legislation which would require new mandatory first-year expenditures of at least $681 million. Of course, it is true, as pointed out in debate, that the concurrent resoli~tion to the budget does not in and of itself say how the money assigned for veterans' benefits must be spent among various programs. But it is equally clear that our committee cannot feed the multitude with a few loaves of bread. Thus, for ex- ample, we could pay for an extension of benefits but only if we cut compensation payments for the disabled, or reduced pensions for needy elderly veterans, or shut down a substantial part of our VA health care system. None of our col- leagues to date, however, has suggested to me that our committee do this. Consequently, I suggest to some of our colleagues that biting the bullet is a year-round occupation and not limited solely to voting on the concurrent resolu- lion on the budget. Senators must also he prepared either to bite the bullet in terms of what they recommend that the authorizing committees enact or at the very least be prepared to suggest what existing programs not be improved or even cut to provide sufficient funds for the legislation they advocate. Mr. ROTH. Mr. President, I am pleased to join with Senators Hartke and Muskie in offering this amendment. I believe it represents a responsible solution to a serious problem. it is a workable approach which we can all support in good conscience. I have wrestled with this problem for several months, attempting to find a solution for the thousands of veterans whose educational careers are threat- ened. At every turn. I encountered the same obstacle: money. All of the possible solutions vastly exceeded the budget limits. But this proposal does not. By providing veterans with an 11th year of benefits at one-half the normal level and a 12th year at one-third, it will permit thousands of veterans to continue their education without interruption. The total cost of $324 million is high, but within the limits of the budget. For a program which has historically proven itself, this will be money well spent. In my State of Delaware alone, there are 1,750 veterans caught in midstream by the expiration of their GI bill educational entitlements. Almost all of them shared a common problem, which was best summarized by one of them in a let- ter written to me in March: "I have been a student at `Goldey Beacom College for almost a year now. I had always wanted to go to college, but could never afford to. Through advertising campaigns by Goldey Beacom, I was delighted to hear about the educational benefits for veterans, as I now could begin to see a dream come true. After working 111/2 years for the same company, I was laid off and it looks as though I will not be called back because of continued cut backs and lay-offs. So you can see this extension bill is important to me in helping me to continue my education. However, if it is defeated, I will have to stop because I will be unable to pay for it." This was a plight shared by hundreds of thousands of veterans, principally because of a combination of unusual circumstances. In 1955, the original GI bill expired and was not renewed by the Congress. Consequently individuals who served in the mil:itary between 1955 and 1966 were not initially eligible for educational benefits. As the Vietnam war intensified, however, sympathy for a new GI bill grew, culminating in the Vietnam Veterans Readjustment Act of 1966. This act estab- lished a program of educational benefits for Vietnam and post-Vietnam era vet- erans. In addition, it established a retro-active program of benefits for the "Cold War Veterans," who had not previously been eligible. PAGENO="0875" 3495 Because these educational benefits were considered by the Congress to be "re- adjustment," the law as later amended required that education be completed by May 31, 1976, or within 10 years after discharge, whichever was later. The difficulty was that many of these veterans had married and settled down by the time the Vietnam Veterans Readjustment Act was enacted in 1966. Bur- dened with family and job responsibilities, they could not immediately enroll in school. The letters which I received were from veterans who have enrolled within the past 1 or 2 years and who were now faced with the prospect of having their educational benefits terminated. Jobs and family responsibilities were not the only reasons many of these vet- erans had only recently enrolled in school. During the past 2 years, educational standards have been liberalized, causing many veterans to reenter the education- al system when they otherwise might not have done so. There are about 400,000 of these veterans throughout the Nation. Most of them, like my constituent, depend heavily on the support which the monthly check provides Although an outright extension of full benefits would be too expensive, this approach is not. Therefore, I would urge my colleagues to support this amendment. Mr President, as I indicated, I have spent quite some time exploring this problem. I ask unanimous consent to have printed in the RECORD some of the various proposals and letters which I reviewed during the course of my study. These include at least two different bills, together with several cost estimates prepared by the Veterans' Administration at my request. I think these documents will demonstrate why I consider the present approach a workable position. There being no objection, the material was ordered to be printed in the Record, as follows: MARCH 22, 1976. Mr. H. DALE GRUBB, Assistant Deputy Administrator, Veterans Adrninistratkm, Washington, D.C. DEAR MR. GRUBB: Thank you for those materials which Mr. Kendall of your staff forwarded to my office regarding the pending expiration of GI Bill benefits for certain veterans. Although the material was helpful, it did not answer my exact questions. On May 31, 1976, the eligibility of certain veterans for GI Bill benefits will expire. These are the so-called "Cold War Veterans," who were released from active duty prior to June 1, 1966. With regard to these veterans, I would like to know the following: 1. How many of these veterans will lose their eligibility on May 31, 1976? 2. How many veterans who are currently enrolled in school and receiving GI Bill benefits will lose those benefits because of the May 31 cutoff? 3. How many in the second group are in Delaware? 4. If the eligibility of the "Cold War" veteran enrolled in school during the current school year were extended so long as they remained continuously en- rolled on at least a one-half time basis, what would be the total cost to the government? If the veterans were required to be enrolled on at least three- quarter time basis? Full time? 5. What would be the total cost if (1) the benefits were extended only if the veteran were enrolled oii a full time basis; and, (2) the benefit payable were seventy-five (75) percent of the normal benefit? It is my understanding that approximately 500,000 "Cold War" veterans are currently enrolled in school and receiving benefits. I would very much appreciate receiving additional information concerning this group. Specifically, on what basis are they attending school (e.g. full time, three-quarter time, etc.), what types of schools are they attending (e.g. vocational schools, universities, etc.), and how many dependents do they, on the average, have. Thank you in advance for your usual prompt cooperation. Sincerely, WILLIAM V. ROTH, Jr., U.$. E~enate. PAGENO="0876" 3496 WASHINGTON, D.C., April 16, 1976. Hon. WILLIAM V. RoTH, Jr., U.S. Senate, Washington, D.C. DEAR SENATOR ROTH: We are happy to provide you with answers to questions in your letter of March 22, 1976 regarding veterans losing eligibility for GI bill training on May 31, 19~6 (including both peacetime post-Korean veterans and those discharged in fiscal years 1965 and 1966). Estimated number of veterans losing their eligibility for school training on May 31, 1976-3,618,000. Estimated number of veterans ~iirolled in school during April 1976 who will lose their entitlement May 31, 1976-483,000. Estimated number of veterans who will train during April 1976 in the state of Delaware and w-ho will lose entitlement May 31, 1976-1,750. The 483,000 in training who will lose entitlement is broken down: Full time 228, 000 Three-fourth time ~ 000 One-half time 82, 000 Less than one-half time 87, 000 These veteran trainees average an estimated 2.65 dependents per trainee (ex- chides flight and on-job trainees but includes farm trainees). The numbers of these trainees in each type of training are estimated as follows Total * 483, 000 Graduate (30, 000) Undergraduate (102, 000) Jummior college (229, 000) Other schools ~ 000 Correspondence ~ 000 *Efltitieliient for flight, farm and on~job training does not expire on May 31. 1976, and trainees in these areas are not included here. The participation rates for the peacetilile post-Korean and early Vietnani (through December 1975), Vietnam era (through December 1975), Korean con- flict amid World War II veterans are shown on accompanying Table 1. The estimated costs of extending the GI 1)111 under the various alternative emititlemnent extensioli plans you presented are still being l)rePared and will be sent to you w-hemi they are completed. For additional information (on training time, type of training taken, depend- etits, etc.), we enclose our Information Bulletins from April 1975 and June 1975, and several tables from the November 1975 bulletin (Tables 2-7). April 1975 I)rovides 1975 peak spring enrollment inforniatiomi. June 1975 provides a fiscal year 1975 summarY, and the November 1975 tables show 1975 peak fall enroll- nient information. These bulletins and Tables (2-7) give statistical informa- tion on peacetime post-Korean veterans (those discharged prior to August 5, 1964). However, this information is not available separately for most of those veterans separated during fiscal years 1965 and 1966 (except in the estimates you requested). Tills latter (early Vietnam era) group is included with the Vietnam era veterans in the Information Bulletins and Tables 2-7. I you should require further explanation of these materials, please do not hesitate to let us know. Sincerely, (Associate Deputy Administrator in the absencc of Richard L. Roudebush, Adn~immistrator) PAGENO="0877" 3497 TABLE 1-3 GI BILLS-COMPARISON OF PARTICIPATION RATES, AFTER 1ST 115 MO OF EDUCATIONAL ASSISTANCE World War II, June 1944 Korean conflict September 1952 to Post-Korean, June 1966 to December Vietnam era, June 1966 to December Peacetime, post-Korean and early Vietnam era, June 1966 to December to end of end of 1975 1975 1975 program program (115 mo) (115 mo) (115 mo) Veteran population Total trained Percent School trainees Percent 15, 440, 000 7, 800, 000 50. 5 5, 710, 000 37. 0 5, 509, 000 2, 391, 000 43. 4 2,073,000 37. 6 10, 963, 000 2 6, 200, 777 56. 6 5,695,715 52. 0 7, 875, 000 1 4, 848, 602 61. 6 4,420,875 56. 1 4,030,000 1, 805, 549 44. 8 1,710,242 42. 4 College Percent Other schools Percent On-job trainees Percent (2, 230, 000) (14. 4) (3, 480, 000) (22.5) 1, 400, 000 9.1 (1, 213, 000) (22. 0) (860, 000) (15.6) 223, 000 4.0 (3, 415, 174) (31. 2) (2, 280, 541) (20.8) 466, 212 4.3 (2, 705, 960) (34. 4) (1, 714, 915) (21.8) 405, 274 5.1 (957, 770) (23. 8) (752, 472) (18.7) 95, 307 2.4 Farm trainees Percent 690, 000 4.5 95, 000 1.7 38, 850 .4 22, 453 .3 (2) I Early Vietnam era includes fiscal year 1965 and 1966 separations. 2 Includes 668,104 service personnel. Count of farm trainees for this group is not available. lion. WILLIAM V. ROTH, Jr., U.s. senate, TVashington, D.C. WAShINGTON, D.C., April 21, 1976. 1)EAR SENATOR RoTh: The additional information requested in your letter of March 22, 1976, regarding the estimated costs of extending the GI Bill under the various alternatives presented in paragraph 4 and 5, is as follows: Continuous enrollment of at least- Trainees Estimated dollar cost of extending eligibility 75 percent of Normal benefit normal benefit Transition quarter: Half-time Three-quarter time Full time 395, 550 358, 650 319, 950 395,550 358, 650 319, 950 202, 991, 400 152, 243, 550 203, 651, 000 152, 738, 325 203, 168, 250 152, 376, 187 991,258,650 743,443,987 994, 477, 500 745, 858, 125 992, 164, 950 774, 123, 712 Fiscal year 1977: Half-time Three-quarter time Full time The cost estimates were based on the assumption that of the 483,000 veterans estimated to be enrolled during April 1976 who would lose their eligibility on 1~iay 31, 1976, 48,300 would drop out due to completion of their program or other reasons. It was assumed that 50% of the remaining veterans would switch froan less than half-time to half-time, half-time to three-quarter time, and three- quarter time to full-time if that was their oaaly alternative. If you should require further explanation of these estimates, we would 1w pleased to furnish additional detail. Sincerely, RICHARD L. ROUDEBIJSH, Alnainistrator. PAGENO="0878" 3498 S. A BILL to authorize the Administrator of Veterans' Affairs to make education loans to certain veterans whose entitlement under chapter 34 of title 38, United States Code, has expired, and to terminate, eligibility for educational benefits under such chapter in the case of persons who enter military service after December 31, 1976 Be it enacted b~j the ~efl(1tC fOUl HouSe of i?eprcsentahvCS of the IJflitCd states of America in (Yen.qress usse;i,hled. That (a) the Administrator of Veterans' Affairs (hereinafter referred to as the "Administrator") is authorized to make loans as provided in this Act to any veteran who makes application therefor and (1) whose eligibility for educational assiStmlIlCe under chapter 34 of title 38, United States Code, was extended under sectioii 1662(c) of such title, (2) who, on the expirat!on of the delimiting period applicable to him under such section had a penod of unused entitlement under such chapter 34, and (3) who was enrolled in and pursuing an approved course of education at any time during the school year 1975-1976 (as defined by the Administrator) for a period of at least ten weeks. (b) Loans authorized under subsection (a) ummay be made in the case of any veteran eligil)le therefor in a total amouiit not exceeding an amount equal to the amount he would have been eligible to receive in educational assistanice allowances for the period of his unused entitlement, as determined by the Administrator. (c) Loans made under this Act shall hear interest at the rate of 3 per centum per annum and shall be re~)ayable over a period not to exceed 10 years, the first payllient to be payable one year after the veteran completes his or her educa- tional program or otherwise terminates such prograln. Repayment by the veteran must he made in installments of iiot less than one-tenth of the amount of the loan, including interest. (d) A veteran shall remain eligible for payments under a loan made under this Act only so long as he continues to pursue his program of education without interruption (except for regular school breaks to which all students enrolled in such course are entitled). (e) The Administrator shall issue such rules and regulations as may be necessary to carry out effectively the provisiolos of this section. SEC. 2. Section 1662 of title 38, United States Code, is amended by adding at the end thereof a new subsection as follows: "Termination of Eligibility "(e) No person shall be entitled to educational assistance under this chapter by virtue of any service on active duty performed on or after January 1, 1977, unless such service w-as a continuation of a period of active duty service per- formed on I)ece°mnber 31, 1976. Service in the armed forces of the United States performed on or after January 1, 1977. pursuant to a reenlistment or a reappoint- nient shall he considered a continuation of service performed prior to such date so long as there is no break in the period of service after December 31, 1976.". Mr. RoTH. Mr. President, ill response to a telephone request, officials of the Veterans' Administratioli provided cost estimates for implementation of a com- bination proposal, which is emni)Odie(l in the following bill draft Cost ESTIMATE-LOAN PROPOSAL OF SENATOR ROTH (a) Following is a 5-year cost estisnate (assuming an effective date of Octo- ber 1, 1976) of the loan program and tl~e provision in the proposed measure to terminate the GI Bill effective January 1, 1977: EDUCATION LOANS (Dollar amounts in millions) Terminate GI bill (effective Jan. 1, 1977) Savings Fiscal year Trainees Loan cost Repayments Net cost Trainees (millions) 1977 480000 ~960.O $960.0 23,350 $13.5 1978 370 560 741.1 $1.2 739.9 83,630 66.3 1979 287,520 575.0 43.9 531.1 185,210 207.2 1980 51.0 -51.0 322,820 433.3 1981 306 1 -306 1 472 700 694 4 5-yr total 2,276.1 402.2 1,873.9 1,415.0 PAGENO="0879" 3499 In arriving at this cost estimate it was assumed that everyone eligible for this loan would choose to benefit. In conversations with the Senator's Administrative Aide, it was determined that the measure was only to apply to those veterans whose eligibility period expired on May 31, 1976; it w'as determined that the loan would apply only to the types of training permitted in the current VA education loan program; and the repayment schedule utilized in the VA loan program was used in attaining the cost estimate. (h) Administrative cost estimate on the load and termination provisions of the proposal: Fiscal-year Man-years Cost Administrative cost, educational loan: 1977 1978. 1979 1980 1981 424.2 327.5 299.7 107.4 247.3 $6,170,300 4,811,300 4,339,600 1,314,800 3,057,600 Administrative savings, termination of Cl bill: 1977 1978 1979 1980 1981 18.8 68.6 151.7 264.2 387.1 (245,600) (906, 100) (2,024,500) (3,5625,00) (5,271,800) In arriving at the cost estimates set forth above it was assumed that each trainee would take advantage of the loan; that there wouid be an average of two loan applications per trainee; and that continuous enrollment would be required of the veteran. (c) Reconciliation of the administrative cost estimate set forth in b. above: Fiscal year Man-years Net cost 1977 1978 1979 1980 1981 405.4 258.9 148.0 (156.8) (139.8) $5,924,700 3,905,200 2,315,100 (2,247700) (2,214,200) (d) The magnitude estimate made here reflects the fact that we have had no experience on the possible effects of such a proposal. To time degree that a lesser number would apply, costs would be proportionate. For example, if 75 percent of the eligibles applied, the loan costs, repayments and net costs would be 75 percent of the amounts shown. Similarly, administrative costs would be reduced in direct proportion. JULY 10, 1976. Mr. RICHARD L. ROUDEBUSH, Administrator, Veterans' Administration, `Washington, D.C. DEAR DICK: I am sure you are aware of the many difficult issues raised by the recent expiration of the GI Bill entitlement `for "cold war veterans." As your staff may have told you, I have given this question a great deal of thought and investigated several alternative solutions to the problem. After study- ing these alternatives and discussing them with my colleagues here in the Senate, I have concluded that one, a low interest loan proposal, deserves your careful at- tention and consideration. For this purpose, I am enclosing copies of cost esti- mates and other information supplied to me by your staff in response to my requests. In addition, I am enclosing a draft of one of the proposals which I reviewed. [hope you will fluid this informnatiomi helpful, and will appreciate receiving your comments. Sincerely, WILLIAM V. ROTH, Jr., UJ~'. Senate. PAGENO="0880" 3500 WASHINGTON, D.C., AuguSt 9, 1976. Hon. WILLIAM V. ROTH, Jr., U.S. Scnate, Washington, D.C. DEAR BILL: This will respond to your letter of July 16, 1976, concerning your proposal to pay educational assistance benefits in the form of a loan to those veterans who were in school during 1975-76, whose eligibility period has run out, but who still have entitlement remaining, and provide for termination of the GI Bill effective JanuarY 1, 1977. Normally, the Veterans Administrati0I~ does not take a position on proposed legislation until it is introduced, referred to the appropriate Committee, a formal request for a report is received from the Chairman asking for our views, and our report is reviewed by the Office of Management and Budget. However, because of your special interest in this matter and the plan of the Senate Committee on Veterans' Affairs to consider GI educatioi1 legislation in the near future, I am submitting our views at this time. It is the position of the Veterans Administration to oppose any measure that would have the effect of continuing benefits to veterans after their eligibility period has expired, since veterans under the current program have had more time in which to utilize their entitlement than that granted to veterans of World War II or the Korean conflict. We believe that the 10-year period granted under cur- rent law is an ample period of time during which veterans may take advantage of their benefits. The President, as well as the Veterans AdministratioIl. strongly favors termin- ation of the current GI Bill program. It is the AdministratiOli's 1)osition that with the ending of hostilities in Vietnam termination of the education program is ap- propriate. This would be in line with action taken to end the earlier World War II and Korean conflict programs. With respect to the provision in your proposal to terminate the program effective December 31. 1976, I call your attention to the fact that we have taken the position in our reports to both the House and Senate Committees on Veterans' Affairs that consideration should be given to providing an exception from the termination date for those individuals signing up under the Defense Departments 1)elayed Entry Program. Under this plan the individual signs up at one point in time but, because of quotas or other reasons, does not enter on actual active duty until a later date, which may he as much as 6 months later and may he after the termination date. Should you decide to introduce your proposal in the Senate I would urge you to give consideration to amending it to insert this DEP exception. I hope that this will assist you in determining if your draft proposal should l)e introduced. Sincerely, RICHARD L. ROIJDEBUSH, ~4 drninistrator. The PRESIDING OFFICER. The question is on agreeing to the amendment of the Senator from New Hampshire. The amendment was agreed to. The PRESIDING OFFICER. If there be no further amnendnieiit to he proposed, the question is on agreeing to the committee amendment. The comniittee amendment, as amended, was agreed to. Mr. HANSEN. Mr. President, reserving the right to object, are w-e talking about the senate bill as it was reported or the Senate bill number with time House-passed legislation? Mr. HARTKE. At the present time this is the Senate reported bill. Mr. HANSEN. This is the Senate reported bill with the Senate language and 110 amendment on it? Mr. HARTKE. The amendments are there from Senator Durkin and Senators Griffin and Abourezk. Mr. HANSEN. May we hold up just one-half niinute? Mr. HARTKE. All right. Mr. GRIFFIN. Mr. President, I have been asked to ask a question, to have ex- plained the Durkin amendment and what the budget impact is. i~1r. HARTKE. The Durkin amendment is an extension of the delimiting period. It allows veterans to use their entitlement beyond the normal 10 year period PAGENO="0881" 3501 in which they must now use their benefits. It authorizes half benefits for those people whose 10-year delimiting period has expired, including a large number of post-Korean veterans who lost benefits as of i~Iay 31 of this year. It authorizes up to 3 years additional training time at half the normal benefit rate. It is within the budget limits adopted by Congress. Mr. HANSEN. I have no objection. The PRESIDING OFFICER. The question is on agreeing to the amendment. The amendment was agreed to. Mr. HARTKE. Mr. President, has the bill been passed? Mr. GRIFFIN. Before passing the bill, I want to observe that while the bill as reported from the Senate Veterans Committee, as I understand it, was submitted to the Budget Committee and did receive a waiver-is that correct? Mr. HARTKE. The bill as reported does not exceed the limits for the veterans function. Mr. GRIFFIN. That does not necessarily hold true with respect to the amend- ment added here on the floor. Mr. HARTKE. This bill, as reported and as it is being amended here tonight, is within the Budget Committee limits. Mr. GRIFFIN. And as amended on the floor? Mr. HARTKE. Yes, and as amended on the floor. Mr. GRIFFIN. I thank the chairman for that information. Mr. JAVITS. Mr. President, I have a question for Senator Hartke. I have a letter from the Secretary of Labor pointing out that he thought it was unwise to establish veterans employment services separately in the Department. That is contained in the bill, is it not? Mr. THURMOND. That is right. Mr. JAVITS. Is that correct? Mr. HARTKE. If the House objects to the provision, we are prepared to with- draw it if necessary to reach agreement before adjournment. Mr. THURMOND. What was the statement of the Senator from Indiana? I can- not hear. Mr. JAVITs. If Senator Hansen can help me- Mr. I~ANsEN. The point being made by the senior Senator from New York is that the Secretary of Labor had objected to an assistant secretaryship being set up in his Department giving the exclusive responsibility for working out vet- erans employment problems. Mr. JAvIT5. That is correct. Mr. HANSEN. I think Senator Hartke is saying that if that is objectionable to the Senator from New York, Senator Hartke is prepared to withdraw that particular- Mr. HARTKE. No, that is not what I am saying. The question here is a ques- tion of jurisdiction on the House side. I am hopeful we can go ahead and have it retained within the bill. Senator Thurmond and I have discussed this matter and would like to insist on keeping it. However, there is a problem here that we have to face on the House side and that is on the point of order. Mr. President, I have a suggestion. This place is floating with people and they are not all Senators. I suggest that the staff members go to the back of the Chamber and have a seat. The PRESIDING OFFICER. The suggestion is well taken. Will staff members idease be seated? Mr. JAvITS. Mr. President, I am very much for this bill. I only raise the ques- tion because a letter has just been received. I ask the Senator to explain that particular provision in view of the objection of the Department of Labor. Mr. HARTKE. The situation is this: We have in this bill a provision for an Assistant Secretary for Veterans Employment. There is a question being raised at this time on the House side as to the question of jurisdiction of the Veterans' Affairs Committee proceeding on this provision. It is our intention at this time fully to go ahead and insist on the Senate position if at all possible. This is the agreement I had with Senator Thurmonci, that we would insist on that position. Mr. THURMOND. I might say a word on this. Mr. ROBERT C. BYRD. Mr. President, do I have the floor? The PRESIDING OFFICER. The Senator from West Virginia has the floor. Mr. JAvrrs. Will the Senator yield? Mr. ROBERT C. BYRD. Yes. Mr. JAvIT5. I still do not understand the answer. Does the Senator want to leave it in? 78-226 0 - 77 - 56 (Pt. 4) PAGENO="0882" 3E~O2 Mr. HARTKE. Yes, I want to leave it in the bill. Mr. JAVITS. The Senator may have to take it out if the House insists? Mr. HARTKE. We do not intend to. I hope they do not so insist. Mr. JAvrrs. The Senator says it is a question of jurisdiction in the House if he leaves it in. Mr. HARTKE. It can present a question of jurisdiction. Mr. JAvITs. It presents a question of jurisdiction here because the Labor Com- mittee, of which I am the ranking minority member, has not even considered it, indeed have never heard of it. Should we take it out and leave the situation neutral, and I will pledge to the Senator to look into it? If it is needed, I am sure that Senator Williams and I and our colleagues will see that it is given. Mr. THTJRMOND. Will the Senator allow me to make a statement on it? Mr. ROBERT C. BYRD. Can the Senator make it in 1 minute or 2 minutes? Mr. THUBM0ND. I think so. Mr. ROBERT C. BYRD. I yield that much time. Mr. THURMOND. Every veterans organization in this country, Mr. President, of any importance, has asked that this be done. The American Legion has passed resolutions at its annual conventions. The Veterans of Foreign Wars have passed resolutions at its annual conventions. The Disabled American Veterans have passed resolutions and so have the AmVets. The reason is simple. The Veterans Employment Office is tucked away down in the Labor Department, and they do not have the authority to deal directly with the Secretary of Labor. The idea is to bring it up to an Assistant Secretary. Veterans employment is only about half of what nonveterans employment is. The veterans organiza- tions in this country feel this should have a higher status so the veterans em- ployment officer in the Department of Labor can do the job and do it properly. He cannot do it now. All the organizations have agreed to that. This is a very in1portant provision, and I would hope the Senate would not take it out, Mr. President. Mr. JAvITs. Mr. President, I am persuaded, though it is risky for me because of the objection of the department, that I, too, believe we have not done as well as we should* on veteran's employment. Therefore, I go along with Senator Hartke and Senator Thurmond in their feelings that this is to be done. Neces- sarily, it is a rather quick decision, but I believe it should go this way. The PREsIDING OFFICER. Is there objection? Without objection, it is so ordered. Mr. JAVITS. I ask unanimous consent that the letter from the Secretary of Labor be printed in the Record. There being no objection, the letter was ordered to be printed; in the Record, as follows: (Letter was not supplied, will appear in the Record at a later date.) Mr. THURMOND. Mr. President, the Veterans Education and Employment As- sistance Act of 1976 (S. 969), is the product of considerable industry on the part of the Veterans' Affairs Committee and its staff. The strong bipartisan sup- port of this measure is a tribute to the leadership of the committee under the chairmanship of Senator Hartke and the ranking Republican member, my col- league, Senator Hansen, and is in keeping with the committee's tradition since 1971, of according the needs of our Nation's veterans, not political expediency, as the highest priority before the committee. Two provisions of the bill deserve particular comment. Since the end of the Vietnam War and the inception of the all-volunteer Army, much opposition has arisen over the continuation of the GI bill education program. Historically, this program was designed to assist veterans who had been drafted into wartime serv- ice in their transition from the military back to the civilian sector. Recent critics have convincingly argued that the cessation of hostilities and the institution of the all-volunteer army have obviated the need for such a readjustment device. S. 969 is responsive to this point of view and also seeks to accommodate our national interest in maintaining a strong national defense. Under this act, the current GI bill education program is terminated for those entering the armed forces after December 31, 1976. In its place will be instituted the Post-Vietnam Era Veterans Readjustment Assistance Program for those entering military service on or after January 1, 1977. Under this voluntary program, participants make contributions in amounts up to $75 per month, which is matched on a 2-to-i basis by the Veteran's Ad- ministration. This new education program, therefore, distinguishes, in terms of the quantum of benefits, peacetime and wartime military service. Additionally, PAGENO="0883" 3503 the contributory vesting program commends to all who participate the old adage of helping those who help themselves. A second major provision of S. 969 is designed to cope with the increasing prob- lem of veterans' unemployment. Statistics indicate that unemployment among young veterans in the age group of 20 to 24 years amounted to 21.7 percent for the first quarter of 1976, as compared to 13.4 percent among nonveterans of the same age group during that period. Knowledgeable individuals in the field of veterans employment have consistantly identified as a major impediment to in- creased enforcement of veterans preference laws the ineffective position of the Veteran's Employment Service, which is buried ~leep within the bureaucracy of the Department of Labor. 5. 969 would enable the Veteran's Employment Serv- ice to meet its responsibilities with a degree of autonomy by elevating its ahead to an Assistant Secretary of Labor for Veteran's Employment. It is expected that this change would dramatically affect the facility with which the head of the YES could carry out his responsibilities and would contribute significantly in reducing the instance of veterans unemployment. Other worthy changes introduced by 5. 969 are the general 8 percent cost-of-liv- ing adjustments to benefits payable under the GI education program, an extension to all students, graduate and undergraduate, of the maximum 45 months of entitlement under chapter 34, and an extension of the 10-year delimiting period in certain instances where a veteran was prevented from completing a program of education due to a disability not the result of the veteran's misconduct. Mr. President, I vigorously support S. 969 and urge my colleagues to do likewise. The bill was ordered to be engrossed for a third reading, read the third time, and passed. The title was amended so as to read: "A bill to amend title 38, United States Code, to iiicrease vocational rehabilita- tion subsistence allowances, educational and training assistance allowances, and special allowances paid to eligible veterans and persons under chapters 31, 34, tion subsistence allowances, educational and training assistance allowances, and for certain dependents from thirty-six to forty-five months; to improve and ex- pand the special programs for educationally disadvantaged veterans and service- men under chapter 34; to improve and expand the education loan program for veterans and persons eligible for benefits under chapter 34 or 35; to create a new chapter 32 (Post-Vietnam Era Veterans' Readjustment Assistance program) for those entering military service on or after January 1, 1977; to make other im- provements in the educational assistance program; to clarify, codify, and strengthen the administration of educational benefits to prevent or reduce abuse; to promote the employment of veterans by improving and expanding the provi- sions governing the operation of the Veterans' Employment Service; and for other purposes." Mr. HARTKE. Mr. President, I move to reconsider the vote by which the bill was passed. Mr. ROBERT C. BYRD. I move to lay that motion on the table. The motion to lay on the table was agreed to. PAGENO="0884" PAGENO="0885" APPENDIX P [From the Congressional Record-House, Oct. 1, 1976] EXTENDING BASIC EDUCATIONAL ASSISTANCE ELIGIBILITY FOR VETERANS AND CERTAIN DEPENDENTS Mr. EDWAJIDS of California. Mr. Speaker, I ask unanimous consent to take from the Speaker's table the Senate bill (5. 969) "To amend title 38, United States Code, to increase vocational rehabilitation subsistence allowances, edu- cational and training assistance allowances, and special allowances paid to eligible veterans and persons under chapters 31, 34, and 35; to extend the basic educational assistance eligibility for veterans and for certain dependents from thirty-six to forty-five months; to improve and expand the special programs for educationally disadvantaged veterans and servicemen under chapter 34; to im- prove and expand the education loan program for veterans and persons eligible for benefits `under chapter 34 or 35; to create a new chapter 32 (post-Vietnam era veterans' readjustment assistance program) for those entering military serv- ice on or after January 1, 1977; to make other improvements in the educational assistance program; to clarify, codify, and strengthen the administration of educational benefits to prevent or reduce abuse; to promote the employment of veterans by improving and expanding the provisions governing the operation of the Veterans' Employment Service; and for other purposes," and ask for its im- mediate consideration in the House. The Clerk read the title of the Senate bill. The SPEAKER pro tempore (Mr. Boiling). Is there objection to the request of the gentleman from California? Mr. BAUMAN. Mr. Speaker, reserving the right to object, may we have some explanation prior to the gentleman's offering his amendment. Mr. EDWARDS of California. Mr. Speaker, if the gentleman will yield, I will say a few words about this veterans' education bill. The House passed HR. 9576 on October 6, 1975. Tonight, at this late hour, we have had the other body send us a bill with several provisions, many of which have far-reaching implications. A number of the provisions of the Senate bill are desirable such as the provision to increase education and training allowances for veterans and their dependents by approxi- mately 8 percent, while others reflect the concern and desire of our committee to curb veterans' education overpayments and provide the Veterans' Administra- tion with a stronger hand in enforcing veterans' education programs and to pre- vent known abuses in the education program. Mr. Speaker, the budget ceiling adopted by the Congress includes funds for this cost of living. This legislation discontinues eligibi'~y for current GI bill benefits after De- cember 31, 1976. The Senate has created a new program which requires the veteran himself or herself to contribute $1 and the Federal Government $2 to create for the serious man a fund, on discharge, for his education. Mr. Speaker, the proposed amendment would provide the establishment of the program on a limited test basis. If the President and Congress decide to keep the program after the test period, its expense will be borne by the Defense Department. Mr. Speaker, the proposed amendment is within our budget allocation, and I hope that the amendment will be adopted. Mr. BAUMAN. Mr. Speaker, I thank the gentleman, and I withdraw my reserva- tion of objection. The SPEAKER pro tempore. Is there objection to the request of the gentleman from California? Mr. HAMMERSCIIMIDT. Mr. Speaker, reserving the right to object, I yield to the gentlewoman from Massachusetts (Mrs. Heckler). Mrs. HECKLER of Massachusetts. Mr. Speaker, I thank the gentleman for yielding. (3505) PAGENO="0886" 3~1~ Mr. Speaker, as ranking minority member of the Subcommittee on Education and Training, Committee on Veterans' Affairs, I support the gentleman's motion to amend S. 969. This measure includes provisions which are vital to the veterans~ educational program. Comprehensive in its coverage and far-reaching in its effect, it deserves passage before this Congress adjourns. Mr. Speaker, the bill before us provides an 8 percent increase in rates paid to eligible veterans in vocational rehabilitation, education, and training, and special programs. Since nearly 2 years have passed since rate increases have been granted, participants in such programs need this S-percent increase to meet the rising costs of education. This measure also extends 9 additional months of eligibility to veterans and certain dependents who are presently limited to 36 months of benefits. Among other advantages, this provision would allow veterans who desire to pursue, or are pursuing, gi~nate study to use the additional months of entitlement for graduate w-ork. Presently, they are denied such entitlement, because the period is limited to undergraduate w-ork. Moreover, Mr. Speaker, this measure improves and expands the veterans' educational loan program, by increasing the maximum amount for an educa- tional loan from $000 to $1,500. The measure also contains a provision to end the current GI bill at the end of this calendar year. Such a provision is in line with the President's preclama- thai of May 7, 1975, closing the Vietnam era. Time proclamation ended eligibility for wartime benefits for persons who entered the service after that date. In view of the original purposes of the (41 bill and iii view of the nature of the present all-volunteer services, continuation of the existing GI bill is inappropriate. How-ever, this measure includes a new- program to meet the educational needs of veterans: The post-Vietnam era educational assistance program. This pro- gram, effective January 1, 1977. is a participatory plan, whereby the Veterans' Administration niatches--by 2 to 1-funds contributed by inservce personnel, to create an educational fund for use after the person leaves the service or completes 6 years of active duty. It has the aim of enhancing recruitment and retention in the Arnied Forces. Moreover, this measure creates a 1)eputy Assistant Secretary of Labor in the I)epartment of Labor, to give greater emphasis to veterans' eniploymnent serv- ices-a needed improvement in focus on veterans' problems. Finally, Mr. Speaker. this measure improves the veterans' education program by tightening the administration of the program, in order to help remedy the educational overpaymeilts problem which confronts the Veterans' Administration. As a Member w-ho has advocated equitable and realistic educational benefits for veterans and their dependents. I support the motion of the gemitleman and urge my colleagues to join me im~ this support. Mr. HAMMERSCHMIDT. Mr. Speaker, I w-ithdraw my reservation of objection. Mr. Speaker, will the gentleman yield? Mr. EDwARDs of California. I yield to the gentleman from Arkansas. Mr. HAMMERSOIIMIDT. Mr. Speaker, I support the gentleman's motion to amend 5. 969. The major provisions of the measure before us are to increase vocational rehabilitation subsistence, education and training, and special allowances paid to ehigil)le veterans: to extend assistance eligibility for veterans from 30 to 4i months; to set a termination date of 1)ecember 31, 1976, for the current GI bill; to create a new educational assistance program for persons entering the Armed Forces on or after January 1, 1977; and to clarify and strengthen the admin- istration of veterans' educational benefits. If the gentlemnaii's request is approved, and 5. 969 as amended, is passed, the veterans' educational prograni will undergo significant and comprehensive changes. These changes are the result of a great deal of toil by the Committee on Veterans' Affairs, in assessing and refining the many provisions w-hich corn- prise the amended bill. Time provisiolls to increase by 8 percent the rates of educational allowances- in time vocational rehabilitation, education and training, and special programs-- are sorely needed. The last increase was granted on December 3, 1974. Since then, nearly 2 years have passed, years in which the educational costs w-hich veterans must pay have risen mnarkedly. The provisiomi to increase eligibility from 36 to 45 months for veterans and certain dependents is both equitable and prudent. The enactment of this provi- sion w-ihl permit students engaged in graduate study to receive an additional PAGENO="0887" 3507 9 months for such work. Heretofore, use of this additional period has been limited to undergraduate study-a restriction which hampers veterans' pursuit of their educational goals. As the sponsor of one of the first bills to grant this added 9 months of entitlement, I can assure you that this provision is strongly advocated by veterans and `fully supported by various veterans' organizations. The provision to terminate the present GI bill, after December 31, 1976, through a redefinition of eligible veteran,' has received extensive debate by this body. It has been under consideration since President Ford, on May 7, 1975, issued a proclamation eliding the so-called Vietnam era, thereby ending eligi- bility for war-tune benefits for persons entering military service after that date. The GI bill was designed to provide vocational readjustment and restore lost educational opportunities to servicemen and women whose careers were inter- rupted or impeded by active duty in the armed services. Now that military serv- ice is entirely voluntary, now that military benefits snake service and civilian careers comparable, it is altogether appropriate that the present GI bill should be terminated. Nonetheless, the educational program may serve as a recruitment-retention device for the military, for which reason a new program, the post-Vietnam era educational assistance program, is being established. The provision to create the post-Vietnam era educational assistance program is designed to enhance all-volunteer military service. Applicable to those who enter the service on or after January 1, 1977, it authorizes the payment of $2 for each $1 contributed by the participant, according to certain specifications. Various provisions to improve and prevent abuses of the educational program are the result of oversight by the committee, particularly regarding educational overpayments. These provisions, in part due to hearings held this past spring by a special subcommittee, `should result in a more effective and more efficient vet- erans' education program. Mr. Speaker, I urge that S. 969 as amended be adopted. The SPEARER pro tempore. Is there objection to the request of the gentleman from California? There was no objection. AMENDMENT OFFERED BY MR. EI)WARDS OF CALIFORNIA Mr. EDWARDS of California. Mr. Speaker, I offer an amendment. The Clerk road as follows: Mr. Edwards moves to strike all after the enacting clause and insert in lieu thereof the follow-ing: That this Act may be cited as the "Veterans' Education and Employment Assist- ance Act of 1976". TITLE I-CHAPTER 31 DISABLED VETERANS' VOCATIONAL REHABILI- TATION RATE AND PROGRAM ADJUSTMENTS SEC. 101. The table contained in section 1504(b) of title 38, United States Code, is amended to read as follows: "Column I Column II Column Ill Column IV Column V No depend- One depend- Two depend- More than two Type of training ents ent ents dependents The amount in column IV, plus the following for each de- pendent in excess of two: Institutional: Full-time $226 $280 $329 $24 Three-quarter-time 170 210 247 18 Half-time 113 140 165 12 Farm cooperative, apprentice, or other on-job training: Full-time 197 238 275 18". PAGENO="0888" 3f508 Sac. 102. Section 1503(c) of title 38, United States Code, is amended by striking out ", but not beyond ten years after such termination date, or June 30, 1975, whichever date is the later," and inserting in lieu thereof "when such action is determined by the Administrator to be necessary for such veteran based upon such veteran's disability and need for vocational rehabilitation,". Sac. 103. Section 1511 of title 38, United States Code, is amended by adding at the end thereof the following: "Notwithstanding any other provision of law-, the facilities of any agency of the United States, as designated in clause (3) of this section, may be used to provide unpaid training or work experience as part or all of a veteran's program of vocational rehabilitation when the Adminis- trator determines such training or work experience to be necessary to accomplish vocational rehabilitation. While pursuing such training or work experience, an uncompensated veteran shall be deemed an employee of the United States for the purposes of the benefits of chapter 81 of title 5 but not for the purposes of laws administered by the Civil Service Commission.". SEC. 104. Chapter 31 of title 38, United States Code, is amended- (1) by striking out in the second sentence of section 1502(b) "him" and inserting in lieu thereof "the veteran"; (2) by striking out in subsections (a) and (b) of section 1503 "his", "he", and "him" each time they appear and inserting in lieu thereof "the vet- eran's", "the veteran", and "the veteran", respectively; (3) by striking out in section 1503(c) "him" and "he" each time they appear and inserting in lieu thereof "the veteran" and by striking out "his" the first and second time it appears and inserting in lieu thereof "the veteran's" and "the veteran", respectively; (4) by striking out in subsections (a) and (c) of section 1504 "his" and "him" and inserting in lieu thereof "the veteran's" and "the employer", respectively; (5) by striking out in section 1505 "he" and "his" and inserting in lieu thereof "the Administrator" and "the veteran's", respectively; (6) by striking out in section 1507 "him" and inserting in lieu thereof "the Administrator"; (7) by striking out in section 1508 "he" and inserting in lieu thereof "the Administrator"; (8) by striking out in section 1509(a) "him", "his", and "he" each time they appear and inserting in lieu thereof "the veteran", "the veteran's", and "the veteran", respectively; (9) by striking out in section 1509(b) "he" and inserting in lieu thereof "the Administrator"; (10) by striking out in section 1510 "he" each time it appears and insert- ing in lieu thereof "such person"; and (11) by striking out in section 1511 "he" and inserting in lieu thereof "the Administrator". TITLE IT-VETERANS' EDUCATION RATE AND PROGRAM ADJUSTMENTS Sac. 201. Chapter 34 of title 38, United States Code, is amended- (1) by amending the table contained in paragraph (1) of section 1682(a) to read as follows: Column Column II No depend- ents Column II One depend- ent Column IV Two depend- ents Column V More than two dependents Type of program . The amount in column IV, plus the following for each de- Institutional: pendent in excess of two: Full-time Three-quarter-time Half-time $292 219 146 $347 260 174 $396 297 198 $24 18 12 Cooperative 235 276 313 18"; PAGENO="0889" 3~5O9 (2) by striking out in section 1682(b) `$270' and inserting in lieu "$292"; (3) by amending the table contained in paragraph (2) of section 1682(e) to read as follows: `Column Column II No depend- ents Column III One depend- eat Column IV Two depend- eats Column V More than two dependents Basis The amount in column IV, plus the following for each de- pendent in excess of two: Full-time $235 $276 $313 $18 Three quarter time 176 207 235 14 Half-time 118 138 157 9 and - (4) by striking out in section 16913(b) "$270" and inserting in lieu thereof "$292". SEc. 202. Section 1652 of title 38, United States Code, is amended by adding at the end thereof the following new subsections: "(1) For the purposes of this chapter and chapter 313 of this title, the terras ~institution of higher leariiing' means a college, university, or similar institution, including a technical or business school, offering postsecondary level academic instruction that leads to an associate or laigher degree if the school is empowered by the appropriate State education authority under state law to grant an asso- ciate or higher degree. When there is no State law to authorize the granting of a degree, the school may be recognized as an institution of higher learning if it is accredited for degree programs by a recognized accrediting agency. Such term shall also include a hospital offering educational programs at the postsecondary level without regard to whether the hospital grants a postsecondary degree; "(g) For the purposes of this chapter and chapter 3G of this title, the term `standard college degree' means an associate or higher degree awarded by (1) an institution of higher learning that is accredited as a collegiate institution by a recognized regional or national accrediting agency; or (2) an institution of higher learning that is a `candidate' for accreditation as that terra is used by the regional or national accrediting agencies; or (3) an institution of higher learn- ing upon completion of a course which is accredited by an agency recognized to accredit specialized degree-level programs. For the purpose of this section, the accrediting agency must be one recognized by the Commissioner of Education under the provisions of section 1775 of this title.". SEc. 203. Section 1661 of title 38, United States Code, is amended- (1) by striking out in the second sentence of subsection (a) all after "period of" the second time it apears and inserting in lieu thereof "45 months (or the equivalent thereof in part-time educational assistance.)"; and (2) by amending subsection (c) to read as follows: "(c) Except as provided in subsection (b) and in subchapters V and VI of this chapter, no eligible veteran shall receive educational assistance under this chapter in excess of 45 months.". SEc. 204. (a) The Administrator shall carry out a study of time vocational objective programs approved for the enrollement of veterans and other eligible persons under chapters 31, 34, 35, and 36 of title 38, United States Code. The study shall include the extent to w-hich such programs are in compliance with tIme applicable provisions of such chapters particularly the requirements of section 1673(a) (2) of that title. (b) The findings and report of such study w-ith respect to the provisions of section 1673(a) (2) of such title shall include, but shall not be limited to- (1) the number of veterans and institutions submitting justification as- serting compliance w'ith the requirements of such section and the extent to which any courses were challenged or disquahifie~ by a State approving agency or by the Veterans' Administration; PAGENO="0890" 3510 (2) the number of institutions and courses for which justification showing compliance with the requirements of such section was not submitted; (3) the number of courses for whicli justification showing compliance with the requirements of this section was submitted and actively reviewed by either the appropriate State approving agency or by the Veterans' Administration; (4) the extent to which courses subject to the requirements of such section have not been identified or surveyed: (5) the extent to which vocational objective programs have been converted to degree programs following enactment of Public Law 93-508; (6) information as to completion rates of those courses submitting place- ment reports pursuant to such section; (7) the extent to which justification submitted pursuant to such section disclosed invalid survey population (8) the extent to which justification submitted pursuant to such section disclosed improper exclusion of students who completed time course but did not take or pass a licensing examination given by the State; (9) the extent to which justification submitted Pursuant to such section disclosed improper exclusion of persons employed in other fields; (10) the extent to w-hich justification sul)mitted pursuant to such section disclosed improper exclusion of persons as being in closely related occupa- tions, when in fact they were not; (11) the extent to which justification submitted pursuant to such section disclosed iml)rOper exclusion of some persons as not being available for employment; (12) the extent to which there are doficiencies in basic procedimres. instruc- tions, and forms issued pursuant to such section ; and (13) the extent to which vocational objective programs are being Pursued for vocational or recreational purposes. (c) The Administrator shall report the results of the study carried out under this section to the Congress and the President not later than 180 days after the date of enactment of this Act and shall include in such report any recommenda- tions for legislative or administrative action the Administrator deems appropriate. SEC. 205. Section 1673 of title 38, United States Code, is amended- (1) by striking out at the' end of subsection (a) (2) "or"; (2) by striking out the period at the end of subsection (a) (3) and insert- ing in lieu thereof"; or"; (3) by adding at the end of subsection (a) a new clause (4) as follows: "(4) any independent study program except one leading to a standard college degree."; and (4) by amending subsection (d) to read as follows: "(d) The Administrator shall not approve the enrollment of any eligible veteran not already enrolled, in any course (other than one offered pursuant to subchapter V, any farm cooperative training course, or any course described in section 1789(0) of this title) for any period during w-hich the Administrator finds that more than 85 per centum of the students enrolled in the course are having all or part of their tuition, fees, or other charges paid to or for them by the educational institution, by the Veterans~ Administration under this title and/or by grants from any Federal agency. The Administrator may waive the requirements of this subsection, in w-hole or in part. if the Administrator determines it to be in the interest of the eligible veteran and the Federal Government.'. SEC. 206. Section 1674 of title 38, United States Code, is amended by inserting imnimiediately after the first sentence thereof the following: "Unless the Admin- istrator finds there are mitigating circumstances. progress will be considered mi- satisfactory at any time the eligible veteran is not progressing at a rate that will permit such veteran to graduate within the approved length of the course based on the training time as certified to the Veterans' Administration.". SEc. 207. Section 1682 of title 38, United States Code, is amended by adding a new subsection (e) at the end thereof as follows `(c) The educational assistance allow-ance of an eligmimle veteran pursuing an independent study program which leads to a standard college degree shall be computed at the rate provided in subsection (b) (2) of this section. In those cases where independent study is combined with resident training and the resident training constitutes the mnajor portiomi of such training, the mnaximumn allowance rimay not exceed the fimli-tmnie institutiommal allowance provided under subsection (a) (1) of this section.'. PAGENO="0891" 3511 Si~c. 208. Section 1685(b) of title 38, United States Code, is amended by adding at the end thereof the following: "In the event the veteran ceases to be a full- time student before completing such agreement, the veteran may, with the ap- proval of the Administrator, be permitted to complete such agreement.". SEC. 209. Section 1692 of title 38, United States Code, is amended by striking out in subsection (b) "$60 and "$720" and inserting in lieu thereof "$65 and "$780", respectively. SEC. 210. Chapter 34 of title 38, United States Code, is amended- (1) by striking out in section 1652(e) `United States Code," (2) by striking out in subsections (a) and (b) of section 1681 `section 1780' and inserting in lieu thereof "chapter 36"; (3) by redesignating section 1697A as section 1698; (4) by striking out in the table of sections at the beginning of such chap- ter "1697A" and inserting in lieu thereof "1698"; and (5) by amending section 1696 by inserting at the end thereof the following new subsection: (d) After October 31, 1976, no person other than a niember of the Armed Forces described in section 1631(b) of this title shall be permitted to enroll, or reenrohl, iii any course provided under the authority of this subchapter.'. SEC. 211. Chapter 34 of title 38, United States Code, is amended- (1) by striking out in subsection (a) and (d) of section 1652 "he" and "wife" and inserting in lieu thereof `such individual" and "spouse", re- ~pectively (2) by striking out in section 1661 (a) "his" and "lie" each time they ap- pear and inserting in lieu thereof "the veteran's" and "the veteran', re- spectively; (3) by striking out in subsections (a), (b), and (d) of section 1662 "his" and "he" each time they appear and inserting in lieu thereof "the veteran's" and "the veteran", respectively; (4) by striking out in section 1663 "he" each time it appears and inserting in lieu thereof "the Administrator"; (5) by striking out in section 1670 "him" each time it appears and insert- ing in lieu thereof "the veteran" (6) by striking out iii section 1671 "lie" the first time it appears and in- serting in lieu `thereof "the Administrator", by striking out "lie" the second time it appears and inserting in lieu thereof `the veteran or person", and by striking out "his" each time it appears and inserting in lieu thei'eof "the veteran's or persoii's"; (7) by striking out iii section 1673 (a) "lie" aad `his" and inserting iii lieu thereof "the Administrator" and "the veterami's", respectively; (8) by striking out in section 1674 "his" and "he" each time they appear and inserting in lieu thereof "the veteran's" and "the Administrator", respectively; (9) by striking out in section 1676 "his" and "he" and inserting in lieu thereof "the Administrator's" and "the Administrator" respectively; (10) by striking out in section 1681 (a) "his" and inserting in lieu thereof "the veteran's"; (11) by striking out in section 1685(c) "he" and "his" each time they ap- pear and inserting in lieu thereof "the Administrator" and "the veteran's", respectively; (12) by striking out in section 1691 (a) "his" and "he" each time they appear and inserting in lieu thereof "the veteran's" and "the veteran", re- spectively; (13) by striking out in section 1696(a) "he" and inserting in lieu thereof ~"the Administrator" ; and (14) by striking out in subsections (a) and (b) of section 1698 (as re- designated by section 211(3) of this Act) "he" and "his" and inserting in lieu thereof "the Administrator" and "such person's", respectively. TITLE Ill-CHApTER 35 SURVIVORS' `AND DEPENDENTS' EDUCATIONAL ASSISTANCE RATE AND PROGRAr~J ADJUSTMENTS SEC. 301, Chapter 35 of this title 38, United States Code, is amended- (1) by striking out in section 1732(b) "5217" and inserting in lieu thereof "$235"; and PAGENO="0892" 3512 (2) by amending subsection (a) of section 1742 to read as follows: "(a) While the eligible person is enrolled in and pursuing a full-time course of special restorative training, the parent or guardian shall be entitled to receive on behalf of such person a special training allowance computed at the basic rate of $292 per month. If `the charges for tuition and fees applicable to any such course are more than $92 per calendar mon'th, the basic monthly allowance may be `increased by the amount that such charges exceed $92 a month, upon election by the parent or guardian `of the eligible person to have such person's period of entitlement reduced by one day for each $9.76 that the special training allowance paid exceeds the basic monthly allowance.". SEC. 302. Section 1701(a) of title 38, United States Code, is amended by adding at the end thereof the following new paragraphs: "(10) For the purposes of this chapter and chapter 36 of this title, the term `institution of higher learning' means a college, university, or similar institution, including a technical or business school, offering postsecondary level academic instruction that leads to an associate or higher degree if the school is empow- ered by `the appropriate State education authority under State law to grant an associate or higher degree. When there is no State law to authorize the granting of a degree, the school may be recognized as an institution of higher learning if it is accredited for degree programs by a recognized aecrediting agency. Such term shall also include a hospital offering educational programs at the postsec- ondary level without regard to whether the hospital grants a postsecondary degree. "(11) For the purposes of this chapter and cha'pter 36 of this title, the term `standard college degree' means an associate or higher degree awarded by (A) an institution of higher learning that is accredited as a collegiate instituti'on by a recognized regional or national accrediting agency; or (B) an institution of higher learning that is a `candidate' for accreditation as that term is' used by the regional or national accrediting agencies: or (C) an institution of higher learning `upon completion of a course which is accredited by an agency recog- nized to accredit specialized degree-level programs. For the purpose of this sec- tion, the accrediting agency must be one recognized by the Commissioner of Edu- cation under the provisions of section 1775 of `this title.". SEC. 303. Section 1711 of title 38, United States Code, is amended- (1) by striking out in subsection (a) "thirty-six" and inserting in lieu thereof"45"; and (2) by striking out, in subsection (b) "nine" and inserting in lieu thereof "12". SEc. 304. Section 1712 of title 38, United States Code, is amended- (1) by striking out in clauses (3) and (4) of subsection (a) "five" each time it appears and inserting in lieu thereof "8"; (2) by amending clause (5) of subsection (a) to read as follows: "(5) (A) If such person is enrolled in an educational institution regularly operated on the quarter or semester system and such period ends during a quarter or semester, such period shall be extended to the end of the quarter or semester; or "(B) if such person is enrolled in an educational institution operated on other than a quarter or semester system and such period ends after a major portion of the course is completed, such period shall be extended to the end of the course, or until 12 weeks have expired, whichever first occurs"; and (3) by repealing subsection (d) and redesignating subsections (e), (f), and (g), as subsections (d), (e), and (f), respectively. SEC. 305. Section 1713 of title 38, United States Code, is amended to read as follows: "The parent or guardian of a person (`or the eligible person if such person has attained legal `majority) for whom educational assistance is sought under this chapter shall submit an application to the Administrator which shall be in such form and contain such information as the Administrator shall prescribe. If the Administrator finds that the person on whose behalf the application is submitted is an eligible person, the Administrator shall approve the application provision- ally. The Administrator shall notify the parent or guardian or eligible person (if the person has attained legal majority) of the provisional approval or of the disapproval of the application." SEC. 306. Section 1723 (a) of title 38, Uiiited States Code, as amended- (1) by striking out at the end of clause (2) "or"; (2) by striking out at the end of clause (3) the period and inserting in lieu thereof"; or"; and PAGENO="0893" 3513 (3) by adding at the end thereof a new clause(4) as follows: "(4) any independent study program except one lemling to a standard college degree.". SEC. 307. Section 1724 of title 38, United States Code, is amended by inserting immediately after the first sentence thereof the following: "Unless the Adminis- trator finds there are nntigatiiig circumstances, progress will be considered un- satisfactors' at any time an eligible person is not progressing at a rate that will permit such person to graduate within the approved length of the course based on the training time as certified to the Veterans' Administration.". SEC. 308. Section 1732(c) of title 38, United States Code, is amended by adding a new paragraph (3) at the end thereof as follows: "(3) The monthly educational assistance allowance to be l)aid on behalf of an eligible person pursuing an independent study program which leads to a standard college degree shall be computed at the rate prescribed in section l682(e) of this title.". SEC. 309, (a) The title of chapter 35 of title 38, United States Code, is amended by striking out "CHAPTER 35-WAR ORPHANS AND WIDOWS EDUCATIONAL ASSISTANCE and inserting in lieu thereof "CHAPTER 35-SURVIVORS' AND 1)EPENDENTS' EDUCATIONAL ASSISTANCE" (b) The table of chapters at the beginning of title 38, United States Code, an(l the table of chapters at the beginning of part III of such title are each amended by striking out "35. War Orphans' and Widows' Educational Assistance 1700" and inserting in lieu thereof "35. SurvIvors' and Dependents' Educational Assistance 1700". (c) Section 1731 (a) is amended by striking out "sec'tion 1780" and inserting in lieu thereof "chapter 36'. SEC. 310. Chapter 35 of title 38, United States Code, is amended- (1) by striking out in section 1700 `widows", `wives", and "his" each time they appear and inserting in lieu thereof "surviving spouses", "Spouses", and "the veteran's", respectively; (2) by striking out in section 1701 (a) "widow" and "wife' each time they appear and inserting in lieu thereof `surviving spouse" and "spouse", respectively; (3) by striking out in section 1701(b) "his" and inserting in lieu thereof "the person's" and by striking out `himself"; (4) by striking out in section 1701(c) "his" each time it appears and inserting in lieu thereof "such person's" and by striking out "himself" (5) by striking out iii section 1701(d) "he" each time it appears and inserting in lieu thereof "such person"; (6) l)y striking out in section 1711(b) "she" the first time it appears and inserting in lieu thereof "the spouse", by striking out "her" each time it appears and inserting in lieu thereof "such person's, and by striking out "he or she" each time it appears and inserting in lieu thereof "such person"; (7) by striking out in section 1712(a) "him", "his", and "he" each time they appear and inserting in lieu thereof "the person", "the person's", and "the person", respectively; (8) by striking out in section 1712(c) "him", "he", "his" each time they appear and inserting in lieu thereof "such person", "such person", and "such person's", respectively; (9) by striking out in subsection (e) and (f) of section 1712 (as re- designated by section 304(3) of this Act) "her" and "he" and inserting in lieu thereof "the" and "such person", respectively; (10) by striking out in section 1720(a) "his" each time it appears and inserting in lieu thereof "such person's"; (11) by striking out in section 1721 "he" and inserting in lieu thereof "the Administrator"; (12) by striking out in section 1723(a) "he" and "his" and inserting in lieu thereof "the Administrator" and "the person's", respectively; PAGENO="0894" 3,5j14 (13) by striking out in section 1723(c) "his" and `he' and inserting in lieu thereof "the Administrator's" and "the Administrator', respectively* (14) by striking out in section 1723(d) "his" each time it appears and in- serting in lieu thereof "such person's"; * (15) by striking out in section 1724 "he" the first time it appears and inserting in lieu thereof "such person", by striking out "his" each time it appears and inserting in lieu thereof "the person's", and by striking out "he" the second time it appears and inserting in lieu thereof "the Adminis- trator"; (1(3) by striking out in section 1731(b) "his" and "he" and inserting in lieu thereof "the person's" and "the person", respectively; (17) by striking out in section 1733(a) "wife or widow" and "she" and inserting in lieu thereof "spouse or surviving spouse" and "such spouse", respectively; (18) by striking out in section 1733(b) "he" and inserting in lieu thereof "such person"; (19) by striking out in section 1734(b) "wife or widow" and inserting in lieu thereof "spouse or surviving spouse"; (20) by striking out in section 1736 "he" and inserting in lieu thereof "the Administrator"; (21) by striking out in section 1741(b) "he" and inserting in lieu `thereof "the Administrator"; (22) by striking out in subsections (a) and (b) of section 1743 "his" and "he" each time they appear and inserting in lieu thereof "the Administra- tor's" and "the Administrator", respectively; (23) by striking out in section 1761 (a) "he" and inserting in lieu thereof "the Administrator"; and (24) by striking out in section 1763 "his" and inserting in lieu thereof "such person's". TITLE IV-POST-VIETNAM ERA VETERANS' EDUCATIONAL ASSISTANCE ACT SEc. 401. This title may be cited as the "Post-Vietnam Era Veterans' Educa- tional Assistance Act of 1977". SEc. 402. Section 1652 of title 38, United States Code, is amended- (1) by amending paragraph (1) of subsection (a) to read as follows: "(1) The term `eligible veteran' means any veteran who- "(A) served on active duty for a period of more `than 180 days, any part of which occurred after January 31, 1955, and l)efore January 1, 1977, and was discharged or released therefrom under conditions other than dishonorable; or "(B) contracted with the Armed Forces and was enlisted in or as- signed to a reserve component prior to January 1, 1977, and as a result of such enlistment or assignment served on active duty for a period of more than 180 days, any part of which commenced within 12 months after January 1, 1977, and was discharged or released from such active duty under conditions other than dishonorable; or "(C) w'as discharged or released from active duty, any part of which was performed after January 31, 1955, and before January 1, 1977, or following entrance into active service from an enlistment provided for under clause (B) of this paragraph, because of a service-connected dis- ability." ; and (2) by inserting in subsection (a) (2) "or (B)" after "paragraph (1) (A)". SEC. 403. (a) Section 1661 (a) of title 38, United States Code, is amended by adding at the end `thereof a new sentence as follows: "In the case of any person serving on active duty on December 31, 1976, or a person whose eligibility is based on section 1652(a) (1) (B) of this chapter, the ending date for computing such person's entitlement shall be the date of such person's first discharge or re- lease from i~ctive duty after December 31. 1976.". (b) Section 1662 of title 38, United States Code, is amended by inserting at time end thereof the following new subsection: "(e) No educational assistance shall he afforded any eligible veteran under this chapter or chapter 36 of this title after December 31, 1989.". SEC. 404. Part III of title 38, United States Code, is amended by inserting immediately after chapter 31 of such title a new chapter as follows: PAGENO="0895" 3515 "CHAPTER 32-POST-VIETNAM ERA VETERANS EDUCATIONAL ASSISTANCE "SUBCHAPTER I-PURPOSE; DEFINITIONS "Sec. `1601. Purpose. "1602. Definitions. "SUBCHAPTER Il-ELIGIBILITY; CONTRIBUTIONs; AND MATCHING FUND "1621. Eligibility. "1622. Contributions; matching fund. "1623. Refunds of contributions upon disenroliment. "1624. Death of participant. "1625. Discharge or release under conditions which would bar use of benefits. "SUBCHAPTER Ill-ENTITLEMENT; DURATION "1631. Entitlement; loan eligibility. "1632. Duration; limitations. "SUBCHAPTER IV-ADMINISTRATI0N "1641. Requirements. "1642. Reporting requirements. "1643. Deposits; reports. "SUBCHAPTER I-PURPOSE; DEFINITIONS "~ 1601. Purpose. "It is the purpose of this chapter (1) to provide educational assistance to those men and wonien who enter the Armed Forces after December 31, 1076, (2) to assist young men and women in obtaining an education they might not other- wise be able to afford, and (3) to promote and assist the all volunteer military program of the United States by attracting qualified men and women to serve in the Armed Forces. "~ 1602. Definitions For the purposes of this chapter- (1) (A) The term `eligible veteran means any veteran who (i) initially entered military service on or after January 1, 1077, served on active duty for a period of more than 180 days commencing on or after such date, and was discharged or released therefrom under conditions other than dishonor- able, or (ii) initially entered military service on or after January 1, 1077, and was discharged or released from active duty after such date for a service- connected disability. "(B) The requirement of discharge or release, prescribed in subparagraph (A), shall be waived in the case of any participant who has completed his or her first obligated period of active duty (which began -after December 31. 1076) or 6 years of active duty (which began after December 31, 1076) whichever period is less. "(C) For the purposes of subparagraphs (A) and (B), the term `active duty' does not include any period during which an individual (i) was assigned full time by the Armed Forces to a civilian institution-for a course of education which was substantially the same as established courses offered to civilians, (ii) served as a cadet or midshipman at one of the service academies or (iii) served under the provisions of section 511(d) of title 10 pursuant to an enlistment in the Army National Guard or the Air National Guard, or as a Reserve for service in the Army Reserve, Naval Reserve, Air Force Reserve, Marine Corps Reserve, or Coast Guard Reserve. "(2) The terms `program of education' and `educational institution shall have the same meaning ascribed to them in sections 1652(b) and 1652(c), respectively, of this title. `(3) The term `participant' is a person who is participating in the educa- tional benefits program established under this chapter. "SUBCHAPTER Il-ELIGIBILITY; CONTRIBUTIONS; Ar~'D MATCHING FUND `~ 1621. Eligibility "(a) Each person entering military service on or after January 1, 1977. shall have the right to enroll in the educational benefits program provided by this PAGENO="0896" 3516 chapter (hereinafter in this chapter referred to as the `programs' except where the text indicates otherwise) at any time during such person's service on active duty. When a person elects to enroll in the program, such person must participate for at least 12 consecutive mouths befere disenrolling or suspending participation. "(b) The requirement for 12 consecutive months of participation required by subsection (a) of this section shall not apply when (1) the participant suspends participatioi~ or disenrolls from the program because of personal hardship as defined in regulations issued jointly by the Administrator and the Secretary of Defense (hereinafter in this chapter referred to as the `Secretary'), or (2) the participant is discharged or released from active duty. `(c) A participant shall be permitted to suspend participation or disenroll from the program at the end of any 12-consedutive-nlOnth period of participation. If participation is suspended, the Participant shall he eligible to make additional contributions to the program under such terms and conditions as shall be pre- scribed by regulations issued jointly by the Adnunistrator and the Secretary. "(d) If a participant disenrolls from the program, such participant forfeits any entitlement to benefits under the program except as provided in subsection (e) of tills section. A participant who disenrolls from the program is eligible for a refund of such participants contributions as provided in section 1623 of this title. (e) A participant who has disenrolled may be permitted to reenroll in tile program under such conditions as shall be prescrihe~l jointly by the Administrator and the Secretary. "~ 1622. Contributions; matcilmg fund "(a) Each person electing to participate in tile program shall agree to have a monthly deduction made from such person's military pay. Such monthly deduc- tion shall be in any amount not less than $50 mior more tllan $75 except that the amount must be divisible by 5. Any such amount contributed by the participant or contributed by the Secretary pursuant to subsection (c) of this section shall be deposited in a deposit fund account entitled the `Post-Vietnam Era Veterans Education Account' (hereafter in this chapter referred to as the `fund') to be established in tile Treasury of the United States. Contributions made by the par- ticipant shall be limited to a mnaxhnumn of $2,700. "(b) Except as otherwise provided in tllis chapter, each monthly contribution made by a participant under subsection (a) shall entitle tile participant to match- ing funds from the Veterans' Administration at the rate of $2 for each $1 con- tributecl by the participant. "(c) The Secretary is authorized to colltril)ute to the fund of any participant such contributions as the Secretary deems necessary or appropriate to encourage persons to enter or remain in the Armed Forces. The Secretary is authorized to issue such rules and regulations as the Secretary deems necessary or appropriate to implement the provisions of this subsection. "~ 1623. Refunds of contributions upon disenrollment "(a) Contributions made to the program by a participant may be refunded only after the participant has disenrolled from the program or as provided in- section 1624. `(b) If a participant disenrolls from tile program prior to discharge or release from active duty, such participamit's contributions will be refunded on the date of the participant's discharge or release from active duty or within 60 days of receipt of notice by the Administrator of the participant's discharge or disenroll- ment, except that refunds may he made earlier in instances of hardship or other good reason as prescribed in regulations issued jointly l)y the Administrator and the Secretary. "(c) If a participant disenrolls from the program after discilarge or release from active duty, the participant's cofltril)utions shall be refunded within 60 days of receipt of an application for a refund from the participant. "(d) In the event tile participant (1) dies while on active duty, (2) dies after discharge or release from active duty, or (3) disenrolls or is disenrolled from the program without having utilized any entitlememit, tile participant may have ac- crued under the program, or, in the event tile participant utilizes part of such participant's entitlement and disenrolls or is disenrolled from the program, the amount contributed by tile Secretary under the authority of section 1622 (c) remaining ill tile fund shall be refunded to the Secretary. "~ 1624. 1)eath of participant "(a) If a participant dies, the amount of such participant's unused contribu- tions to the fund shall be paid (1) to the beneficiary or beneficiaries designated PAGENO="0897" 3517 by such participant under such participant's Servicemen's Group Life Insurance policy, or (2) to the participant's estate if no beneficiary has been designated under such policy or if the participant is not insured under the Servicemens Group Life Insurance program. (b) If a participant dies after having been discharged or released from ac- tive duty and before using any or all of the contributions which the participant made to the fund, such unused contributions shall be paid as prescribed in sub- section (a) of this section. "~ 1625. Discharge or release under conditions which would bar the use of benefits "If a participant in the program is discharged or released from active duty under dishonorable conditions, such participant is automatically disenrolled and any contributions made by such participant shall be refunded to such participant on the date of such participant's discharge or release from active duty or within 60 days from receipt of notice by the Administrator of such discharge or release, whichever is later. "Subchapter Ill-Entitlement; Duration "~ 1631. Entitlement; loan eligibility "(a) (1) A participant shall be entitled to a inaxiinuni of 36 monthly benefit payments (or their equivalent in the event of part-tinie benefit payments). "(2) `The amount of the monthly payment to which any eligible veteran is entitled shall be ascertained by (A) adding all contributions made to the fund by the eligible veteran, (B) multiplying the sum by 3, (C) adding all contribu- tirnis made to the fund for such veteran by the Secretary, and (D) dividing the sum by the lesser of 36 or the number of months in w-hieh contributions were made by such veteran. (3) Payment of benefits under this chapter may be made only for periods of' time during which an eligible veteran is actually enrolled in and pursuing an approved program of education and, except as provided in paragraph (4), only after an eligible veteran has been discharged, or released from active duty. "(4) Payment of benefits under this chapter may be made after a participaiit has completed his ~ her first obligated period of active duty (which began after December 31, 1076) or 6 years of active duty (which began after December 31, 1976), whichever I)eriod is less. `(b) Any enlisted member of the Armed Forces I)articil)ating in the l)rogram shall be eligible to participate in the Prediseharge Education Program (PREP), authorized by subchapter VI of chapter 34 of this title, during the last 6 months of such member's first enlistment. (c) When an eligible veteran is pursuing either a program of education under this chapter by correspondence or a program of flight training, such ehigibtme veteran's entitlement shall be charged at the rate of 1 month's entitlement for each month of benefits paid to the eligible veteran (computed on the basis of the formula provided in subsection (a) (2) of this section). "(d) Eligible veterans participating in the program shall be eligible for edu- cation loans authorized by subchapter III of chapter 36 of this title in such amounts and on the same terms and conditions as provided in such subchapter. except that the term `eligible veterami' as used in such subchapter shall be deemed to include `eligible veteran' as defined in this chapter. "~ 1632. Duration; limitations "No educational assistance benefits shall be afforded an eligible veteran under this chapter beyond the date of 10 years after such veteran's last discharge or release from active duty. In the event an eligible veteran has not utilized any or all of such veteran's entitlement by the end of the 10-year period, such eligible veteran is automatically disenrolled and any contributions made by such veteran remaining in the fund shall be refunded to the veteran follow-lug notice to the veteran and an application by the veteran for such refund. If no application is received within 1 year from date of notice, it will be presumed for the purposes of subsection (a) of section 725s of title 31, that the individual's whereabouts is unknown and the funds shall be transferred as directed in the last proviso of that subsection. "Subchapter IV-Administration "~ 1641. Requirements "The provisions of sections 1670, 1671. 1673, 1674, 1676, 1677, 1681(c), 1683, 1696, and 1698 of this title and the provisions of chapter 36 of this title, with the exception of sections 1777, 1780(c), and 1787, shall lie applicable to the program. 78-226 0 - 77 - 57 (Pt.4) PAGENO="0898" 3518 "~ 1642. Reporting requirements "The Administrator and the Secretary shall, within 90 days after the date of enactment of this chapter, submit to the Committees on Veterans' Affairs of the Senate and House of Representatives a joint report containing their respective plans for implementation of the program provided for in this chapter. The Ad- mninistrator and the Secretary shall submit to such committees a report each year detailing the operations of the program during the preceding year. The first such annual report shall be submitted 15 months after the date of enactment of this section. "~ 1643. Deposits; reports "Deductions made by the Department of Defense from the military pay of any participant shall be promptly transferred to the Administrator for deposit in the fund. The Secretary shall also submit to the Administrator a report each month showing the name, service number, and the amount of the deduction made from the military pay of each initial enrollee, any contribution made by the Secretary pursuant to section 1622(c), as well as any changes in each participant's enroll- ment and/or contribution. Time report shall also include any additional informa- tion the Administrator and the Secretary deem necessary to administer this program. The Administrator shall maintain accounts showing contributions made to the fund by individual participaiits and by the Secretary as well as dis- bursements made from the fund in the form of benefits.". SEC. 405. The table of chapters at the beginning of title 38, United States Code, and the table of chapters at the beginning of part III of such title are each amended by inserting immediately below "31. Vocational Rehabilitation 1501" the following: "32. Post-Vietnam Era Veterans' Educational Assistance 1601". SEC. 406. TIme provisions of this title shall become effective on January 1, 1977. SEC. 407. Section 725s (b) of title 31, United States Code, is amended by adding at the end thereof the following: "(84) Post-Vietnam Era Veterans Education Account, Veterans' Administration." SEC. 408. (a) (1) No individual on active duty in the Armed Forces may ini- tially enroll in the educational assistance program provided for in chapter 32 of title 38, United States Code (as added by section 404 of this Act) after Decem- ber 31, 1981, unless- (A) before June 1, 1981, the President submits to both Houses of Congress a written recommendation that such program continue to be open for new enroll- ments; and (B) before the close of the 60-day period after the day on which the president submits to Congress the recommendation described in subparagraph (A), neither the House of Representatives nor the Senate adopts, by an affirmative vote of a majority of those present and voting in that House, a resolution which in sub- stance disapproves such recommendation. (2) For purposes of computing the 60-day period referred to in paragraph (1) (B) there shall be excluded- (A) the days on which either House is not in session because of an adjourn- ment of more than 3 days to a day certain or an adjournment of the Congress sine die, and (B) any Saturday and Sunday, not excluded under the preceding subpara- graph, when eIther House is not in session. The recommendation referred to in paragraph (1) (A) shall be delivered to both Houses of Congress on the same day and shall be delivered to the Clerk of the House of Representatives if the House is not in session and to the Secretary of the Senate if the Senate is not in session. . (b) If new enrollments after December 31, 1981, in the educational assistance program provided for in such chapter 32 are authorized after the application of the provisions of subsection (a), then effective January 1, 1982, section 1622(b) of title 38, United States Code, is amended by striking out "Veterans' Administra- tion" and inserting in lieu thereof "Department of Defense". TITLE V_CHAPTER 36 EDUCATION LOAN AND PROGRAM ADMINISTRATION AMENDMENTS SEC. 501. Chapter 36 of title 38, United States Code, is amended- PAGENO="0899" 3~19 (1) by striking out in section 1786(a) (2) "$270" and inserting in lieu thereof "$292"; and (2) by amending the table contained in paragraph (1) of section 1878(b) to read as follows: `Column I Column II Column Ill Column IV Column V No depend- One depend- Two depend- More than two Periods of training ents not ents dependents The amount in column IV, plus the . following for each de- pendent in excess of two: First 6 months $212 $238 Second 6 months 159 185 $260 $11 Third 6 months 106 132 207 11 Fourth and any succeeding 6-month periods 53 79 154 101 11 11"; SEC. 502. (a) Section 1798 of title 38, United States Code, is amended- (1) by striking out mi subsection (b) (3) "$270" and "$600" and inserting ui lieu thereof "$292" and "$1,500', respectively; and (2) by amending clause (3) of subsection (d) to read as follow-s: "(3) shall provide that the loan shall hear interest, on the unpaid balance of the loan, at a rate prescribed by the Administrator, at the tune the loan is contracted for which rate shall be coiuuparable to the rate of interest charged students as such time oh loans insured by the Commissioner of Edu- cation, Department of Health, Education, and Welfare, under part B of title IV of the Higher Education Act of 1905, but in no event shall the rate so prescribed by the Administrator exceed the rate charged students on such insured loans, and shall provide that no interest shall accrue prior to the beginning date of repayment; and (b) The amendments made by subsection (a) shall be effective with respect to loans made under section 1798 of title 38, United States Code, on and after October 1, 1976. SEC. 503. Section 1774 of title 38, United States Code, is anuended- (1) by adding at the end of subsection (a) thereof the follow-ing new' sentence: "The Adnuinistrator may also reimburse such agencies for w-ork performed by their subcontractors where such work has a direct relation- ship to the requirements of chapter 32, 34, 35, or 30 of this title, and has had the prior approval of the Administrator."; and (2) by amending subsection (b) to read as follow-s: "(b) The allowance for administrative expenses incurred pursuant to sub- section (a) of this section shall be paid in accordance with the following formula: "Total salary cost reimbursable Allowable for administrative expense under this section $5,000 or less $600. Over $5,000 but not exceeding $10,000 $1,080, Over $10,000 but not exceeding $35,000 $1,080 for the first $10,000 plus $1,000 for each additional $5,000 for fraction thereof, Over $35,000 but not exceeding $40,000 $6,535. Over $40,000 but not exceeding $75,000 $6,535 for the first $40,000 plus $865 for each additional $5,000 or fraction thereof. Over $75,000 but not exceeding $80,000 $12,900. Over $80,000 $12,960 for the first $80,000 plus $755 for each additional $5,000 or fraction thereof.". PAGENO="0900" 3520 SEC. 504. Section 1775 of title 38, United States Code, is amended- (1) by striking out the period at the end of subsection (a) and inserting in lieu thereof "which must be certified as true and correct in content and policy by an authorized representative of the school. The catalog or bulletin must specifically state its progress requirements for graduation and must in- clude as a minimum the information required by section 1770(b) (6) and (7) of this title," ; and (2) by inserting before the period in the first sentence of subsection (b) the following: "and must include as a minimum (except for attendance) the requirements set forth in section 1770(c) (7) of this title". SEC. 505. Section 1780(a) of title 38, United States Code, is amended- (1) by striking out at the end of clause (1) "or"; (2) by striking out the period at the end of clause (2) and inserting in lieu thereof a semicolon; and (3) by inserting immediately after clause (2) the following new clauses: "(3) to any eligible veteran or person for auditing a course; "(4) to any eligible veteran or person for a course for which the grade assigned is not used in computing the requirements for graduation including a course from which the student withdraws unless the Administrator finds there are mitigating circumstances; or "(5) to any eligible veteran or person for pursuit of a program of education exclusively by correspondence as authorized under section 1780 of this title or for the pursuit of a correspondence portion of a combination correspondence- residence course leading to a vocational objective where the normal period of time required to complete such correspondence course or portiomi is less than 0 imionths. A certification as to the normal period of time required to complete the course must be made to the Administrator by the educational institution.". SEC. 506. The last sentence of section 1780(a) of title 38, United States Code, is amended to read as follows: `Notwithstanding the foregoing, the Administrator may, subject to such regulations as the Administrator shall prescribe, continue to pay allowances to eligible veterans and eligible persons enrolled in courses set forth in clause (1) or (2) of this subsection- "(A) during periods when the schools are temporarily closed under an established policy based upon an Executive order of time President or (me to an emergency situation, and such periods shall not he counted as absence for the purposes of clause (2) "(B) during periods between consecutive school terms where such veterans or persons transfer from one approved educational institution to another approved e(1ucatiOnal institution for the purpose of enrolling in and pursuing a similar course at the second institution if time period between such con- secutive terms does not exceed 30 diys, l)ut such l)eriods shall be counted as absences for the purPoses of clause (2) ; or "(C) during periods between a semester. term, or quarter where the educational institution certifies the enrollment of the eligible veteran or eligible persoim on an individual semester, term, or quarter basis if the inter- val between such periods does not exceed 1 full calendar month, but such periods shall be counted as absences for the purposes of clause (2) .". SEC. 507. Section 1784(a) of title 38, TJnited States Code, is amended by adding at the end thereof the following: "Time date of interruption or termination will be the last date of pursuit or, in the case of correspondence training, the last date a lesson was serviced by the school.". SEC. 508. Section 1784(b) of title 38. United States Code, is amended by striking out "$3" and "$4" and inserting in lieu thereof "$5" and "$6", respectively. SEC. 509. (a) Section 1788(a) of title 38, United States Code, is amended- (1) by striking out time semicolon at the end of clause 1 and inserting in lieu thereof a comma and time following: "but if such course is approved pursuant to section 1775 of this title, tlmen 27 hours per week of attendance, with no more than 21/2 hours of rest I)eriod per week allowed and excluding supervised study, shall be considered full time ;" ; and (2) by striking out the senmicolon at time end of clause 2 and inserting in lieu thereof a comma and the following : `l)ut if such course is apprOve(1 pursuant to section 1775 of this title, then 22 hours per week net of instruction (excluding supervised study). whicim mimay include customary intervals not to exceed ten `mmminutes betweeim hours of iimstiuction, slmahl be coimsidered full time (h) Section 1789 of title 38, United States Code. is amended- (1) by striking out `or" at the end of clause (4) in subsection (b) PAGENO="0901" 3521 (2) by striking out the period at the end of clause (5) in subsection (b) and inserting in lieu thereof"; or"; (3) by adding at the end of subsection (b) a new clause (6) to read as follows: "(6) any course offered by an educational institution under a contract with the Department of Defense that (A) is given on, or immediately ad- jacent to, a military base; (B) is available only to active duty military personnel and/or their dependents and (C) has been approved by the State approving agency of the State in which the base is located"; and (4) by adding at the end thereof a new- subsection (c) as follows: "(c) Notwithstanding the provisions of subsection (b) (1), (2), (3), or (4) of this section, the provisions of subsection (a) shall apply to any course offered.by a branch or extension of- "(1) a public or other tax-supported institution where the branch or extension is located outside of the area of the taxing jurisdiction pro- viding support to such institution; or "(2) a proprietary profit or proprietary nonprofit educational insti- tution where the branch or extension is located beyond the normal corn- muting distance of such institution.". SEc. 510. Section 1790(c) of title 38, United States Code, is amended to read as follows: (c) Notwithstanding any other provision of law, the records and accounts of educational institutions pertaining to eligible veterans or eligible persons Who received educational assistance under this chapter or chapter 31, 32, 34, or 35 of this title, as well as the records of other students which the Administrator deter- mines necessary to ascertain institutional compliaiice with the requirements of such chapters, shall be available for examination by duly authorized representa- tives of the Government.". SEC. 511. Subchapter II of chapter 36, United States Code, is amended- (1) by striking out section 1793 and inserting in lieu thereof the following: "~ 1793. Compliance surveys "The Administrator shall conduct an annual compliance survey of each in- stitution offering one or more courses approved for the enrollment of eligible veterans or persons where at least 300 veterans or persons are enrolled under provisions of this title or where the course does not lead to a standard college degree. Such compliance survey shall assure that the institution and approved courses are in compliance with all applicable provisions of chapters 31, 34, 35, and 36 of this title. The Administrator shall assign at least one education compliance specialist to work on compliance surveys in any year for each 40 compliance surveys required to be made under this section."; and (2) by striking out in the table of sections at the beginning of chapter 36 of such title "1793. Institutions listed by Attorney General." and inserting in lieu thereof "1793. Compliance surveys.". SEC. 512. Section 1796 of title 38, United States Code, is amended- (1) I)y redesignating subsections (b) and (c) as (c) and (d), respectively; and (2) by inserting after subsection (a) a new subsection (Ii) as follows: `(b) To ensure compliance with this section, any institution offering courses approved for the enrollment of eligible persons or veterans shall maintain a complete record of all advertising, sales, or enrollment materials (and copies thereof) utilized by or on behalf of the institution during the preceding 12-month period. Such record shall be available for inspection by the State approving agency or the Administrator. Such materials shall in- dude but are not limited to any direct mail pieces, brochures, printed liter- ature used by sales persons, films, video tapes, and audio tapes disseminated through broadcast media, material disseminated through print media, tear sheets, leaflets, handbills, fliers, and any sales or recruitment manuals used to instruct sales personnel, agents, or representatives of such institution.". SEc. 513. (a) Chapter 36 of title 38, United States Code, is amended- (1) by striking out in section 1771(a) "his" and inserting in lieu thereof "such"; (2) by striking out in section 1775(a) "he" and insertthg in lieu thereof "the Commissioner"; PAGENO="0902" 3522 (3) by striking out in subsections (b) and (c) of section 1777 "he", "him," "his" each time they appear and inserting in lieu thereof "the veteran or person", "the veteran or person", and "such veteran's or person's", respec- tively (4) by striking out in section 1779(b) "his" and inserting in lieu thereof "the Administrator's"; (5) by striking out in subsections (a) and (b) of section 1780 "his", "wife or widow", and "wife's or widow's" each time they appear and inserting in lieu thereof "such veteran's or person's", "spouse or surviving spouse", and "spouse's or surviving spouse's", respectively; (6) by striking out in subsections (c) and (d) of section 1780 "his" and "he" each time they appear and inserting in lieu thereof "such veteran's or person's" and "the veteran or person", respectively; (7) by inserting "may" immediately before "need" in section 1780(d) (1) (8) by inserting immediately after the fourth sentence in section 1780(d) (2) the following new sentence: "An advance payment may not be made under this subsection to any veteran or person unless the veteran or person requests such payment and the Administrator finds that the educational in- stitution at which such veteran or person is accepted or enrolled has agreed to, and can satisfactorily, carry out the provisions of paragraphs 5 (B) and (C) and (6) of this subsection." (9) by striking out section 1780 (e) and the heading thereto: (10) by redesignating subsections (f), (g), `and (h) of section 1780 as subsections (e), (f), and (g), respectively, and by adding at the end of such subsection (g), (as so redesignated) the following: "Subject to such reports and *proof as the Administrator may require to show an eligible veteran's or eligible person's enrollment in and satisfactory pursuit of such person's program, the Administrator is authorized to withhold the final payment of benefits to such person until the required proof is received and the amount of the final payment is appropriately adjusted."; (11) by striking out in section 1780(f) "him" and inserting in lieu thereof `such veteran or person"; (12) by striking out in section 1780(h) "he" the first time it appears and inserting in lieu thereof "the Administrator" and by striking out "he" the second time it appears and inserting in lieu thereof "the veteran or person"; (13) by striking out in section 1781 "him" and inserting in lieu thereof "such person"; (14) by striking out in section 1783(a) "his" and inserting in lieu thereof "such officer's or employee's"; (15) by striking out in section 1783(b) "he" the first time it appears and inserting in lieu thereof "such person" and by striking out "he" the second time it appears and inserting in lieu thereof "the Adminisrtator"; (16) by striking out in section 1783(d) "he" and inserting in lieu thereof "the Administrator"; (17) by striking out in subsections (a) and (b) of section 1784 "him" and inserting in lieu thereof "the Administrator"; (18) by striking out in subsections (a), (b), and (c) of section 1786 "wife and widow" and "his" each time they appear and inserting in lieu thereof "spouse or surviving spouse" and "such veteran's or spouse's", respectively; (19) by striking out in subsections (a), (b), and (d) of section 1790 "he" each time it appears and inserting in lieu thereof "the Administrator"; (20) by striking out in subsections (a), (b) and (c) of section 1791 "his" and "he" each time `they appear and inserting in lieu thereof "the veteran's or person's" and "the Administrator", respectively; (21) by striking out in section 1794 "his" and inserting in lieu thereof "the Administrator's"; (22) by striking out in section 1796(c) (as redesignated l)y section 513(1) of this Act) "his" and inserting in lieu thereof "the Administrator's" (23) by striking out in section 1798(h) (1) "he" and inserting in lieu thereof "the veteran or person" and by striking out in section 1798(e) (1) "he" and inserting in lieu thereof "the Administrator" ; all(i (24) by striking out in section 1799(d) "his" and inserting in lieu thereof "the Administratoi"s". (b) The amendments mimade by paragraphs (7), (8), (9), and (10) of subsection (a) shall take effect June 1. 1977. amid shall apply with respect to educational assistance allowances and sul)sistence allowances paid under title 38, United States Code, for months after May 1977. PAGENO="0903" 3523 TITLE VI-VETERANS' EMPL(YYMENT ASSISTANCE PROVISIONS SEC. 601. (a) Section 2002 of title 38, United States Code, is amended by insert- ing "by a Deputy Assistant Secretary of Labor for Veterans' Employment, estab- lished by section 2002A of this title," after "promulgated and administered. (b) Chapter 41 of title 38. United States Code, is amended by- (1) adding after section 2002 a new section as follows: "§ 2002A. DEPUTY ASSISTANT SECRETARY OF LABOR FOR VETERANS' EMPLOYMENT "There is established within the T)epaitmnent of Labor a Deputy Assistant Secretary of Labor for Veterans' Employment, appointed by the PreSident by and with the advice and consent of the Senate, who shall be the principal adviser to the Secretary of Labor with respect to the formulation and imnplenientation of all departmental policies and procedureS to carry out (1) the purposes of this chapter, chapter 42, and chapter 43 of this title, and (2) all other Department of Labor employment, unemployment, and training l)rograms to the extent they affect veterans,"; and (2) amending the table of sections at the beginning of chapter 41 of such title by inserting "2002A. DEPUTY ASSISTANT SECRETARY OF LABOR FOR VETERANS' EMPLOYMENT.' after "2002. PURPOSES.". (c) Section 104(a) of the Emergency Jobs and Unemployment Assistance Act of 1974 (Public Law 93-567) is repealed. SEC. 602. Section 2003 of title 38, United States Code, is amended- (1) by inserting in the fourth sentence "or by prime sponsors under the Corn- prehensive Employment and Training Act" after "programs administered by the Secretary"; (2) by striking out "and" at tile end of clause (5) ; and (3) by redesignating clause (6) as clause (7) and inserting new clause (6) as follows: (6) promote the participation of veterans in Comprehensive Employment and Training Act programs and monitor tile implementation and operation of Coma- prehensive Employment and Training Act programs to assure that eligible vet- erans receive special consideration when required : and". SEC. 603. Section 2006(a) of title 38, United States Code, is amended by insert- ing in the last sentence "each" after "Shall". SEC. 604. Section 2007 of title 38. United States Code, is amended- (1) by striking out in subsection (a) (1) "his" and inserting in lieu thereof "such veteran's and eligible person's"; (2) by inserting in the second sentence of Sul)section (c) "an(l public service employment" after "occupational training"; and (3) by striking out in the last Sentence of subsection (c) "or 2006" and inserting in lieu thereof ", 2006, or 2007 (a) ". SEC. 605. Section 2012 of title 38, United States Code, is amended by adding at the end thereof a new subsection (c) as follows: "(c) The Secretary shall include as part of the annual report required by section 2007(c) of this title the number of complaints filed l)ursuaflt to sub- section (b) of this section, the actions taken thereon and the resolutions thereof. Such report shall also include the number. of contractors listing suitable employ- mnent openings, the nature, types, and number of positions listed and the number of veterans receiving priority pursuant to subsection (a) (2) of this section.". * SEC. 606. Chapter 41 of title 38, United States Code, is amended- (1) by striking out in section 2003 "he" and "his" and inserting in lieu thereof "the Secretary" and "such representative's", respectively; (2) by striking out in section 2004 "his" and inserting in lieu thereof "such representative's" and by inserting "or eligible persons" after "eligible veterans"; (3) *by striking out in section 2005 "he" and inserting in lieu thereof "the Secretary"; and (4) by striking out in section 2008 "his" and "him" and inserting in lieu thereof "the Secretary's" and "the Administrator," respectively. SEC. 607. Chapter 42 of title 38, United States Code, is amended- (1) by striking out in section 2011(2) "his" and inserting in lieu thereof "the person's"; and PAGENO="0904" 3524 (2) by striking out in the first sentence of section 2012(b) "his" and inserting in lieu thereof "the contractor's". SEC. 608. Chapter 43 of title 38, United States Code, is amended- (1) by striking out in section 2021(a) (2) (B) "his" each time it appears and inserting in lieu thereof "the employer's'; (2) by striking out in section 2021(b) (2) "his" and `he" and inserting in lieu thereof "the person" and "the person's", respectively; and (3) by striking out in the sixth sentence of section 2024(d) `his" each time it appears and inserting in lieu thereof "such employer's'. TITLE Vu-MISCELLANEOUS AN1) EFFECTIVE DATE SEC. 701. Section 3101(a) of title 38, United States Code, is amended by adding at the end thereof the following: "For the purposes of this subsection, in any case where a payee of an educational assistance allowance has designated the address of an attorney-rn-fact as the payee's address for the purpose of receiving his or her benefit check and has also executed a power of attorney giving the attorney-in-fact authority to negotiate such benefit check, such action shall be deemed to be an assignment and is prohibited.'. SEC. 702. Section 2108(1) (B) of title 5, United States Code, is amended by striking out "after January 31, 1955," and inserting in lieu thereof "any part of which occurred after January 31, 1955, and before the date of enactment of the Veterans' Education and Employment Assistance Act of 1976,". SEC. 703. (a) Sections 101, 201, 203, 207, 209, 301, 303, 304, 308, 501, 502. 503, and 508 of this Act shall become effective on October 1, 1976. (b) Sections 102, 104, 202., 204, 205(1), 205(2), 205(3), 208, 210, 211, 302, 305, 306, 309, 310, 506, 510, 511, and 513 (other than paragraphs (7), (8), (9), and (10) of subsection (a)) of this Act shall become effective on the date of the enactment of this Act. (c) Sections 103, 205(4), 206, 307, 504, 505, 507, 509, 512, and 701 and title VI of this Act shall become effective on December 1, 1976. Mr. EDWARDS of California (during the reading). Mr. Speaker, due to the fact that I have already explained this amendment, I would ask unanimous con- sent that the House amendment be considered as read and printed in the Record. The SPEAKER pro tempore. Is there objection to the request of the gentleman from California? There was no objection. The amendment was agreed to. Mr. TEAGUE. Mr. Speaker, I rise now in support of the gentleman's unanimous- consent request, but first I want to express my sincere appreciation to our dis- tinguished chairman for his yielding to me and for having provided for us during this session of the Congress the leadership and the complete cooperation which has permitted us to arrive at this point. During this session of the Congress comprehensive hearings were conducted in special investigative hearings of the Subcommittee on Education and Training chaired by our able colleague, Mr. Mottl of Ohio. In these hearings we looked into the serious problem of overpay- ments and of laxities in enforcement of standards of progress in the veterans' education programs. As amended, this bill would go further than the version that was originally passed by the House October 6, 1975. The bill now incorporates not only a needed cost-of-living rate increase in the area of 8 percent but it provides for substantive program changes which are dictated by the fact that the Vietnam era conflict has ended, that we are now dealing with an all-volunteer Army, and that the needs of the individuals currently entering active duty are far different from those for whom the post-Korean educational assistance pro- gram was designed. The bill as amended continues the provision terminating the accrual of entitle- ment under the post-Korean educational assistance program and it provides for a new program with participation of the individual. While the bill now discontinues accumulation of eligibility for GI bill benefits after December 31, 1976, and sets up as a test a new program under which the veteran would contribute $1 and the Federal Government would contribute $2 to create an educational assistance fund available to the veteran for education and training purposes on his discharge. Should this test warrant continuation by the Congress and the President at the end of 5 years, then it is contemplated that the program would be continued and the expense of the program would then be assumed by the Defense Department. We have concurred in these Senate amendments. We have not concurred in a PAGENO="0905" 3525 Senate provision which would have automatically triggered resumption of the GI bill in event of a resumption of the draft. This should not be interpreted as any departure from previously well established policy. The principle of education and readjustment assistance for individuals who enter the Armed Forces on an invol- untary basis during a time of emergency has been well established by the actions of the Congress in the past. We would contemplate that should it again become necessary to reinstitute a draft that the Congress would respond immediately to extend education and readjustment benefits to such drafted individuals and to design the program in the light of the needs then apparent. I believe you should understand that our attempts to address ourselves to the problems which we found during the special hearings into educational abuses and about which you cannot but be aware because of a continuing publicity accorded these matters represent a melding of suggestions we have received from the ad- ministration, attempts at correction incorporated in the Senate version of the bill and our efforts. I can only hope that with these amendments and the steps already taken by the Veterans' Administration those who are enrolling in edu- cational programs supported with your tax-provided dollars will be exposed to some educational experience rather than as so often today is the case permitted to enroll draw their benefits and never go close to a classroom. The amendments added by the Senate are consistent with our objective to minimize abuses in ad- ministration of the program and to strengthen the hand of the administrator to the extent possible in order that he can assure that individuals participating in the program will acquire the added education and training needed to take their rightful place in our economy. Provisions of the bill as originally passed by the House and as still con- tained would extend the maximum educational benefits to 45 months for all eli- gible veterans and would provide as well for the same number of months of en- titleinent for those survivors and dependents of veterans who are permanently and totally disabled or who died of service-connected disabilities. The predischarge education program which was established by Public Law 91-219 back in 1970 was originally designed to provided assistance to servicemen and women which would permit them on discharge to pursue education and train- ing or some vocation. The assistance intended by that provision was to make avail- able a limited program of education or training prior to discharge from active duty which would provide an entry level of competency for the intended additional education or vocational pursuit. We were at that time engaged in hostilities. Indi- viduals were being drafted. There were those going into service who needed high school completion work or a course or two to make it possible for them to immedi- ately and adequately utilize the educational assistance provided by the Veter- ans' Administration programs upon their release. It just now appears that there is no continued need for the prep program as it is now being presently utilized, which is at the beginning of an individual's enlistment rather than just imme- diately before his separation. We have terminated the prep program for new enrollments for all those whose entitlement exists under current programs but have made available during the last 6 months of an enlistment the same type of entry level training for those servicemen and women who participate in the new cooperative program. I urge you to support this bill. Mr. ROBERTS. Mr. Speaker, on October 6, 1975, the House by a vote of 298 to 106 with one voting present passed and sent to the Senate H.R. 9576. the Vet- trans Readjustment Assistance Amendments of 1975. This bill was developed after hearings and consideration of a number of important factors affecting the veterans' readjustment assistance allowance program. It recognized substantially changed circumstances that had come into being subsequent to the time that this program was developed and put on the statute books. Among other things, it Provided for a termination date of December 31, 1975, in establishing eligibility ior education and trainitig benefits under chapters 34 and 36 of title 38. These are the so-called post-Korean Vietnam era educational benefit provisions. You will recall that on May 7, 1975, the President issued a proclamation which termi- nated the Vietnam era war and at that time transmitted to the Congress a pro- posed bill to set a termination date for veterans' educational benefits under these chapters. There was for consideration also the cessation of hostilities, and the fact of an all-volunteer Armed Forces. Those who have accumulated and would acquire eligibility for education and training benefits through December 31, 1975, would be preserved in their entitlement to utilize these benefits through Decem- ber 31, 198w, under the same rules which have, heretofore, governed such benefits. 78-226 0-77 -58 (Pt.4) PAGENO="0906" 3526 The bill as passed by the House also would have extended the maximum educa- tional benefits available to eligible veterans to 45 months. This made the addi- tional 9 months of entitlement available to all veterans on the same basis that the extended entitlement was provided for those seeking an undergraduate col- lege degree. The bill provided for a repeal of the predischarge educational pro- gram which has been known as "PREP," w-ith a savings provision for those currently enrolled. The bill also provided for payment of educational assistance mllowauces in certain cases where a veteran or a dependent transferred from o~e approved educational institution to another educational institution without a true break in pursuit of educational objectives. The bill provided for the termi- nation of eligibility for preference in Federal employment in the case of in- dividuals entering the military service after May 7, 1975, the ending date of the Vietnam era. There were also two I)rOvisiOfls of the entitlement to VA home h~an benefits which have subsequently been enacted into law. The Senate, earlier tonight, considered and passed S. 969 with numerous prr visions not yet considered by the Committee on Veterans' Affairs. The bill is not totally inconsistent with the provisions passed by the House, but goes much further. There has been *a lapse of a year since the passage of the original bill. During that time, this committee has held through its Subcommittee on Education and Trainings, extensive hearings oriented toward overpayments and enforcement of standards in the veterans' education program. Congressman Mottl of Ohio, and his select subcommittee, conducted extensive investigations and came up with a series of recommendations for improvement. Most of Con- gressman Motti's recommendations are included in this bill. I commend him and other members of the subcommittee for a fine job. The proposed House amendment w-ill keep intact the original provisions included in the bill we have already passed in the House, and would make other improvements in the education programs. I will summarize for you these pro- visions: The bill will now provide for an approximate 8-percent increase in educational allowance payments for all three of the programs administered by the Veterans' Administration. This includes the vocational rehabilitation program for those veterans with service-connected disabilities receiving training to over- come their handicaps. It would provide the increases for the post-Korean and Vietnam veterans pursuing educational benefits under chapters 34 and 36 of title 38, United States Code, and it would provide the increases in education allowances for the spouse and children of veterans, who are permanently and totally disabled from service-connected causes, or veterans who have died from such causes. In this area the provisions of the amendments are identical with those of the Senate-passed version of the bill. The provisions would make certain changes in the vocational rehabilitation program for service-connected veterans. It would restore entitlement to training for seriously disabled veterans, or blinded veterans beyond the usual termination date for assistance. These entitle- ments ended May 31, 1975. Our amendments would restore to the Administrator the authority to give rehabilitation training to the seriously disabled where it is shown the disability has increased and it is shown that the disabilities are severe, and that vocational rehabilitation would lead to some useful pursuit. It was with some reluctance that we agreed to the restoration of this entitlement passed 1975 for veterans who served iii World War II, and it is with the strict understanding that the Administrator will take steps to assure that the abuses known to have existed under the prior provisions of law do not again occur, that there will not be again instances in which individuals w'ho have completed a normal career and retired or at an advanced stage be given extensive training which could not possibly lead to a vocational pursuit. The definition of serious disability is also for strict interpretation. Also incorporated is the provision that permits U.S. governmental agencies to offer unpaid work experience as a part of a vocational rehabilitation program. The amendments affecting the veterans' assistance program extends increases in benefit allowances to all programs except the flight training program. The number of administrative refinements are contained in the bill which generally seek to insure the integrity of the program to correct abuses associated with lax administration or regulations bearing on satisfactory pursuit of programs, and upon the overpayments problem. Eligibility for participation in the PREP program will be limited with reason- able safeguards for those already enrolled at time of enactment if these provi- sions become law. When the predischarge education program was established by Public Law 91-219, in 1970, it was designed to assist servicemen and women PAGENO="0907" 3L~27 to prepare for their future education training or vocation by providing them Opportunity to enroll and pursue a program of education training prior to their discharge from active duty in the Armed Forces. The PREP program was specifically designed to help the civilian soldier in his return to civilian life following the period of necessary service during a time of national emergency. With an all-volunteer Army, such a program is not considered necessary, and it is particularly not appropriate as it is currently utilized, that is, at the begin- fling of a period of enlistment. The educational assistance program for spouses and children of the service- connected would benefit from the same type of administrative improvements provided for chapter 34 veterans. It would extend the same rate increases and for the first time the individual now entitled to 36 months training would be entitled to 45 months of training on the same basis that this was extended to veterans. The Senate amendments which are included in my amendment would increase the maximum amount of the educational loan now available from $600 to $1,500 and would vary the formula for computing these loans to recognize the increase monthly assistance levels. The Veterans' Administration has historically contracted State approving agencies to provide the service of approving courses when they are of such merit as to warrant enrollment of those assisted by Veterans' Administration administered programs. This bill would recognize in- creased costs and would adjust `the amounts available for payment to State approving agencies as reimbursement for their service. I am particularly pleased with the amendments which would tighten the ad- ministration of these education programs, and would seek `to assure that those who are receiving benefits are actually exposed to an educational process. Our amendments include those developed by the subcommittee findings together with proposals contained in the Senate version for obtaining similar ends, and to the extent possible in view of `the importance of this effort we have concurred in the proposals for improving administration sent over to us by the Senate. One of the things that seems clear to all of us is that a major part of the blame for massive overpayments is related to the ill-conceived provisions which provide for un- limited advance payments and for prepayment of monthly benefit amounts. You will recall that the Appropriations Act for the Veterans' Administration con- tains a limitation which would have precluded the use of funds for prepayments and limit advance payments after June 1, 1977. We believe this problem is one that requires a direct approach by the Congress and we have included provisions which after June 1, 1977, will permit advance payment on enrollment only on application by the veteran when he is enrolling in an institution which is will- ing to accept the responsibilities for seeing that the veteran does enroll and that the Veterans' Administration is notified should he fail to enroll and pursue his program. Another provision provides that prepayment of educational assist- ance will be made at the end or after the end of each month in which entitle- ment is earned. The proposed amendment is identical with a provision of the Senate bill relat- ing to the nonassignabihity and exempt status of VA educational benefits as fol- lows: When a payee of an educational check has designated the address of an attorney-in-fact as the address for check receipt purposes, and has also executed a power of attorney giving such a'ttorney-in-fact the authority to negotiate the benefit check, such agreement will be held to l)e an assignment of the benefit, and as such prohibited. The provisions of law prohibiting assignment of veterans benefits go back to 1883 and have their basis in the desire to prevent the ad- ministering governmental agency from being placed in the position of a collec- tion agency, and what is more important, to prevent the depriva'tion and deple- tion of the means of subsistence of veterans and their dependents who rely upon veterans' benefits as a substantial source of their income. It was not until 1972 that an interpretation of the general counsel of the Veterans' Administra- tion rendered an opinion which required the Veterans~ Administration to coop- erate in check delivery arrangements which resulted in an effective assignment of benefits and contravention of the clear congressional intent. Experience under this opinion has been so poor that in commenting on this proposal, the Veterans' Administration said: We believe that to continue to permit such situations to occur would ec to encourage more fraud and open the door to even more potential abuses of the programs. We, therefore, fully support this provision of the substitute proposal. PAGENO="0908" ~528 Other amendments would terminate the accumulation of educational entitle- ment after December 31, 1976, but with a Senate added exception which would take care of those individuals who have enlisted under contracts which permit the deferral of their entry into service not more than 12 months or before T)e- cember 31, 1977. Persons in the military service on December 31, 1976, or entering service under the exception during 1977, could utilize their educational benefits through December 31, 1989, at which time the program will be finally ended. While we have removed the section which would have automatically trig- gered resumption of the GI bill in the event of reinstitution of the draft, it should be clearly understood that this does not represent a departure from previously established policy. Through a series of actions by the Congress, the principle of education and readjustment assistance for the individual who enters the Armed Forces on an involuntary basis has been clearly established. In the event it becomes necessary to reinstate the draft, we would expect tl1e Congress to take immediate action to extend education and readjustment benefits to servicemen being drafted or entering the Armed Forces on an involuntary basis. At that time, however, Congress would find it necessary to survey the situation, particularly as it relates to educational needs, economic levels, and so forth, to establish a program specifically designed to meet the situation as it might exist at that time. As previously indicated, the Senate has created a new veterans education assistance program beginning January 1, 1977. It will be a contributory program with the veteran contributing $1, and the Federal Government $2 up to a maxi- mum of $8,100 for those who are discharged or complete a term of active duty service to provide a fund for his education. We have agreed to this amendment on the basis that it is a pilot program which will help the Armed Forces in its recruitment of members for our volunteer forces. The cost for the first few years will be minimal. If after a period of 5 years the President recommends and the Congress agrees to keep the program, then the expense will be borne by the Defense Department. The maximum cost of the House amendments in fiscal year 1977 would he approximately $495.4 million. Although the amount exceeds the allocation of the Subcommittee on Education and Training by approximately $40 million, the cost of the bill does not exceed the allocation of the full committee estab- lished in the second concurrent resolution wherein our new entitlement authority was set at $1.397 billion. Mr. MOTTL. Mr. Speaker, I rise in support of the proposed House amendment. It has been my privilege to serve on the House Committee on Veterans' Af- fairs during this 94th Congress. In addition, I was honored by being appointed chairman of a special Subcommittee to Investigate Educational Overpayments and the Enforcement of Standards of Education as administered by the Vet- erans' Administration. The principal cause of the need for a special subcom- mittee was the shockingly high number of educational overpayments which have occurred during recent years. At the time of our hearings which were held dur- ing the months of April, May, and June of this year, the Overpayments were in excess of $1 billion. In the interim, the total now approaches $1.8 billion. Unless the Congress acts, the educational overpayment problem will not only continue but will increase. Another aspect of the educational overpayment problem is the number of abuses or "rip-offs" of the GI bill program. The great majority of veterans are using the GI bill as intended by Congress; namely, for a quick, successful re- adjustment to civilian life following their period to service in the Armed Forces. Unfortunately there is a small percentage of unscrupulous veterans who, to- gether with sharp operators, have bilked the Federal Government out of millions of dollars. A major contributing factor has been the difficulty experienced by the VA in carrying out more strict enforcement of the laws enacted by Congress. Following our hearings, I introduced a bill cosponsored by a number of mem- bers of our special subcommittee including the distinguished chairman of the Subcommittee on Education and Training, Mr. TEAGUE, and the chairman of our full committee, Mr. ROBERTS. This subcommittee-developed bill (H.R. 15070) con- tains a number of provisions which reflect the concern and desire of the sub- committee regarding both the overpayments and elimination of known and identifiable abuses of the veterans' education program. In addition our subcommittee was told that a major cause of the overpayinenis is found in the congressional approval of both the prepayment and advance pay- PAGENO="0909" 3529 ment provision whereby a veteran can obtain a check for up to 3 months of his entitlement before he is actually enrolled for educational training. Lastly, the subcommittee-developed bill includes an 8-percent increase in the education rates and contains other provisions which will be extremely helpful to the seriously service-connected disabled veterans in their efforts to overcome their employment handicaps. Mr. Speaker, the amendment now before the House, H.R. 9576, contains most of the provisions which were incorporated in the bill I introduced following our oversight hearings on educational overpayments. I am pleased that these provi- sions aimed at tightening the Veteran's Administration regulations and making it much more difficult to abuse the program, both by veterans and by educa- tional institutions are contained in the proposed House amendment. By eliminat- ing the prepayment altogether by June 1, 1977, and making the advance payment available only upon request of the veteran, I feel a significant portion of the overpayments will be eliminated in the future, resulting in cost savings to the taxpayers of our country and a much better program. I urge my colleagues to adopt the proposed House amendment. The Senate bill was ordered to be read a third time, was read the third time, and passed. The title was amended so as to read: "An act to amend title 38, United ~ltates Code, to set a termination date for veterans educational benefits under chapters 34 and 36, to increase vocational rehabilitation subsistence allowances, educa- tional and training assistance allowances, and special allowances paid to eligible veterans and persons under chapters 31, 34, and 35; to extend the basic educa- tional assistance eligibility for veterans and for certain dependents from thirty- six to forty-five months; to improve and expand the special program for educa- tionally disadvantaged veterans and servicemen under chapter 34; to improve and expand the education loan progra~n for veterans and persons eligible for benefits under chapter 34 or 35; to create a new chapter 32 (Post-Vietnam Era Veterans' Educational Assistance program) for those entering military service on or after January 1, 1977; to make other improvements in the educational assistance program; to clarify, codify, and strengthen the administration of ed- ucational benefits to prevent or reduce abuse; to promote the employment of veterans by improving and expanding the provisions governing the operation of the Veterans' Employment Service, and for other purposes." A motion to reconsider was laid on the table. PAGENO="0910" PAGENO="0911" APPENDIX E PUBLIC LAW 94-502-OCT. 15, 1976 90 STAT. 2383 Public Law 94-502 94th Congress An Act To amend title 38, United States Code, to set a termination date for veterans' Oct. 15, 1976 educational benefits under chapters 34 and 30, to Increase vocational rehabili- tation subsistence allowances, educational and training assistance allowances, and special allowances paid to eligible veterans and persons under chapters 31, 34, and 35; to extend the basic educational assistance eligibility for vet- erans and for certain dependents from thirty-six to forty-five months; to Improve and expand the special programs for educationally disadvantaged veterans and servicemen under chapter 34; to improve and expand the educa- tion loan program for veterans and persons eligible for benefits under chapter 34 or 35; to create a new chapter 32 (Post-Vietnam Era Veterans' Educational Assistance program) for those entering military service on or after January 1, 1971; to make other improvements in the educational assistance program; to clarify, codify, and strengthen the administration of educational benefits to prevent or reduce abuse; to promote the employment of veterans by Improving and expanding the provisions governing the operation of Veterans' Employ- ment Service; and for other purposes. Be it enacted by the Senate and Hou8e of Representative8 of the United State8 of America in Congress assembled, That this Act may Veterans' be cited as the "Veterans' Education and Employment Assistance Education and Act of 1976". Employment Assistance Act of TITLE I-CHAPTER 31 DISABLED VETERANS' VOCA- ~ iøi note. TIONAL REHABILITATION RATE AND PROGRAM ADJUSTMENTS SEC. 101. The table contained in section 1504(b) of title 38, United States Code, is amended to read as follows: "Column I Column II Column III Column IV Column V Type of training No de- pendents One de- pendent Two de- pendents More than two dependents Institutional: Full-time Three-quarter- time Half-time Farm cooperative, apprentice, or other on-job training: Full-time $226 170 113 197 $280 210 140 238 $329 247 165 275 The amount in column IV, plus the fol- lowing for each de- pendent in excess of two: ~ $24 18 12 18". (3531) PAGENO="0912" 3532 90 STAT. 2384 PUBLIC LAW 94-502-OCT. 15, 1976 SEC. 102. Section 1503(c) of title 38, United States Code, is amended by striking out ", but not beyond ten years after such termination date, or June 30, 1975, whichever date is the later," and inserting in lieu thereof "when such action is determined by the Administrator to be necessary for such veteran based upon such veteran's disability and need for vocational rehabilitation,". SEC. 103. Section 1511 of title 38, United States Code, is amended by adding at the end thereof the following: "Notwithstanding any other provision of law, the facilities of any agency of the United States, as designated in clause (3) of this section, may be used to provide unpaid training or work experience as part or all of a vet- eran's program of vocational rehabilitation when the Administrator determines such training or work experience to be necessary to accom- plish vocational rehabilitation. While pursuing such training or work experience, an uncompensated veteran shall be deemed an employee of the United States for the purposes of the benefits of chapter 81 of title 5 but not for the purposes of laws administered by the Civil Service Commission.". SEC. 104. Chapter 31 of title 38, United States Code, is amended- 38 USC 1502. (1) by striking out in the second sentence of section 1502(b) "him" and inserting in lieu thereof "the veteran"; 38 USC 1503. (2) by striking out in subsections (a) and (b) of section 1503 "his", "he", and "him" each time they appear and inserting in lieu thereof "the veteran's", "the veteran", and "the veteran", respectively; (3) by striking out in section 1503(c) "him" and "he" each time they appear and inserting in lieu thereof "the veteran" and by striking out "his" the first and second time it appeafs and insert- ing in lieu thereof "the veteran's" and "the veteran", respectively; 38 USC 1504. ~ by striking out in subsections (a) and (c) of section 1504 "his' and "him" and inserting in lieu thereof "the veteran's" aM "the employer", respectively; 38 U5C 1505. (5) by striking out in section 1505 "he" and "his" and insert- ing in lieu thereof "the Administrator" and "the veteran's", respectively; 38 USC 1507. (6) by striking out in section 1507 "him" and inserting in lieu thereof "the Administrator"; 38 U5C 1508. (7) by striking out in section 1508 "he" and inserting in lieu thereof "the Administrator"; 38 USC 1509. (8) by striking out in section 1509(a) "him", "his", and "he" each time they appear and inserting in lieu thereof "the veteran", "the veteran's", and "the veteran", respectively; (9) by striking out in section 1509(b) "he" and inserting in lieu thereof "the Administrator"; 38 Usc 1510. (10) by striking out in section 1510 "he" each time it appears and inserting in lieu thereof "such person"; and 38 USC 1511. (11) by striking out in section 1511 "he" and inserting in lieu thereof "the Administrator". TITLE Il-VETERANS' EDUCATION RATE AND PROGRAM ADJUSTMENTS Sr.c. 201. Chapter 34 of title 38, United States Code, is amended- (1) by amending the table contained in paragraph (1) of sec- 38 usc 1682. tion 1682(a) to read as follows: PAGENO="0913" 3533 PUBLIC LAW 94-502-OCT. 15, 1976 90 STAT. 2385 "Column I Column II Column III Column IV Column V Type of program No de- pendents One de- pendent Two de- pendents More than two dependents . Institutional: Full-time Three-quarter- time Half-time Cooperative $292 219 146 23b $347 260 174 276 $396 297 198 313 The amount in column IV, plus the fol- lowing for each de- pendent in excess of two: $24 18 12 18"; (2) by striking out in section 1682(b) "$270" and inserting in 38 Usc 1682. lieu thereof "$292"; (3) by amending the table contained in paragraph (2) of sec- tion 1682(c) to read as follows: "Column I Column II Column III Column IV Column V Basis No de- pendents One de- pendent Two de- pendents More than two dependents Full-time Throe-quarter-time~ Half-time $235 176 118 $276 207 138 $313 235 157 The amount in column IV, plus the fol- lowing for each de- pendent in excess of two: $18 14 9"; and (4) by striking out in section 1696(b) "$270" and inserting in 38 Usc 1696. lieu thereof "$292". SEC. 202. Section 1652 of title 38, United States Code, is amended by adding at the end thereof the following new subsections: "(f) For the purposes of this chapter and chapter 36 of this title, "Institution of the term `institution of higher learning' means a college, university, or higher learning. similar institution, including a technical or business school, offering 38 usc 1770 et postsecondary level academic instruction that leads to an associate or seq. higher degree if the school is empowered by the appropriate State education authority under State law to grant an associate or higher PAGENO="0914" 3534 90 STAT. 2386 PUBLIC LAW 94-502-OCT. 15, 1976 degree. When there is no State law to authorize the granting of a degree, the school may be recognized as an institution of higher learn- ing if it is accredited for degree programs by a recognized accrediting agency. Such term shall also include a hospital offering educational programs at the postsecondary level without regard to whether the hospital grants a postsecondary degree. "Standard "(g) For the purposes of this chapter and chapter 36 of this title, college degree." the term `standard college degree' means an associate or higher degree 38 USC 1770 et awarded by (1) an institution of higher learning that is accredited as seq. a collegiate institution by a recognized regional or national accredit- ing agency; or (2) an institution of higher learning that is a `candi- date' for accreditation as that term is used by the regional or national accrediting agencies; or (3) an institution of higher learning upon completion of a course which is accredited by an agency recognized to accredit specialized degree-level programs. For the purpose of this section, the accrediting agency must be one recognized by the Commis- sioner of Education under the provisions of section 1775 of this title.". SEC. 203. Section 1661 of title 38, United States Code, is amended- (1) by striking out in the second sentence of subsection (a) all after "period of" the second time it appears and inserting in lieu thereof "45 months (or the equivalent thereof in part-time educa- tional assistance)."; and (2) by amending subsection (c) to read as follows: "(c) Except as provided in subsection (b) and in subchapters V 38 USC 1690, and VI of this chapter, no eligible veteran shall receive educational 1695. assistance under this chapter in excess of 45 months.". Study. SEC. 204. (a) The Administrator shall carry out a study of the voca- 38 USC 1501 tional objective programs approved for the enrollment of veterans and note, other eligible persons under chapters 31, 34, 35 and 36 of title 38, 38 USC 1501, United States Code. The study shall include the extent to which such 1770 programs are in compliance with the applicable provisions of such chapters particularly the requirements of section 1673(a) (2) of that 38 USC 1673. title. (b) The findings and report of such study with respect to the pro- visions of section 1673 (a) (2) of such title shall include but shall not be limited to- (1) the number of veterans and institutions submitting justi- fication asserting compliance with the requirements of such sec- tion and the extent to which any courses were challenged or disqualified by a State approving agency or by the Veterans' Administration; (2) the number of institutions and courses for which justifica- tion showing compliance with the requirements of such section was not submitted; (3) the number of courses for which justification showing com- pliance with the requirements of this section was submitted and actively reviewed by either the appropriate State approving agency or by the Veterans' Administration; (4) the extent to which courses subject to the requirements of such section have not been identified or surveyed; (5) the extent to which vocational objective programs have been converted to degree programs following enactment of Public 38 USC 1501 Law 93-508; note. (6) information as to completion rates of those courses sub- mitting placement reports pursuant to such section; PAGENO="0915" 3535 PUBLIC LAW 94-502-OCT. 15, 1976 90 STAT. 2387 (7) the extent to which justification submitted pursuant to such section disclosed invalid survey population; (8) the extent to which justification submitted pursuant to such section disclosed improper exclusion of students who com- pleted the course but did not take or pass a licensing examination given by the State; (9) the extent to which justification submitted pursuant to such section disclosed improper exclusion of persons employed in other fields; (10) the extent to which justification submitted pursuant to such section disclosed improper exclusion of persons as being in closely related occupations, when in fact they were not; (11) the extent to which justification submitted pursuant to such section disclosed improper exclusion of some persons as not beinr available for employment; (12) the extent to which there are deficiencies in basic proce- dures, instructions, and forms issued pursuant to such section; and (13) the extent to which vocational objective programs are being pursued for avocational or recreational purposes. (c) The Administrator shall report the results of the study carried Report to out under this section to the Congress and the President not later President and than 180 days after the date of enactment of this Act and shall include Congress. in such report any recommendations for legislative or administrative action the Administrator deems appropriate. SEc. 205. Section 1673 of title 38, United States Code, is amended- (1) by striking out. at the end of subsection (a) (2) "or"; (2) by striking out the period at the end of subsection (a) (3) and inserting in lieu thereof"; or"; (3) by adding at the end of subsection (a) a new clause (4) as follows: "(4) any independent study program except one leading to a standard college degree."; and (4) by amending subsection (d) to read as follows: "(d) The Administrator shall not approve the enrollment of any eligible veteran, not already enrolled, in any course (other than one offered pursuant to subchapter V, any farm cooperative training course, or any course described in section 1789(b) (6) of this title) for any period during which the Administrator finds that more than 85 per centum of the students enrolled in the course are having all or part of their tuition, fees, or other charges paid to or for them by the educational institution, by the Veterans' Administration under this title and/or by grants from any Federal agency. The Administra- tor may waive the requirements of this subsection, in whole or in part, if the Administrator determines it to be in the interest of the eligible veteran and the Federal Government.". SEC. 206. Section 1674 of title 38, United States Code, is amended by inserting immediately after the first sentence thereof the following: "Unless the Administrator finds there are mitigating circumstances, progress will be considered unsatisfactory at any time the eligible veteran is not progressing at a rate that will permit such veteran to graduate within the approved length of the course based on the training time as certified to the Veterans' Administration.". SEC. 207. Section 1682 of title 38, United States Code, is amended by adding a new subsection (e) at the end thereof as follows: PAGENO="0916" 3536 90 STAT. 2388 PUBLIC LAW 94-502-OCT. 15, 1976 "(e) The educational assistance allowance of an eligible veteran pursuing an independent study program which leads to a standard college degree shall be computed at the rate provided in subsection (b) (2) of this section. In those cases where independent .study is com- bined with resident training and the resident training constitutes the major portion of such training, the maximum allowance may not exceed the full-time institutional allowance provided under subsection (a) (1) of this section.". SEC. 208. Section 1685(b) of title 38, United States Code, is amended by adding at the end thereof the following: "In the event the veteran ceases to be a full-time student before completing such agreement, the veteran may, with the approval of the Administrator, be permitted to complete such agreement.". Special SEC. 209. Section 1692 of title 38, United States Code, is amended, supplementary by striking out in subsection (b) "$60" and "$720' and inserting in lieu assistance. thereof ~ and "$780", respectively. SEC. 210. Chapter 34 of title 38, United States Code, is amended- 38 USC 1652. (1) by striking out in section 1652(e) "United States Code,"; (2) by striking out in subsections (a) and (b) of section 1681 "section 1780" and inserting in lieu thereof "chapter 36"; 38 USC 1697A. (3) by redesignating section 1697A as section 1698; (4) by striking out in the table of sections at the beginning of such chapter "1697A" and insertino in lieu thereof "1698"; and 38 USC 1696. (5) by amending section 1696 by inserting at the end thereof the following new subsection: "(d) After October 31, 1976, no person other than a member of the 38 USC 1631. Armed Forces described in section 1631(b) of this title shall be per- mitted to enroll, or re-enroll, in any course provided under the authority of this subchapter.". SEC. 211. Chapter 34 of title 38, United States Code, is amended- 38 USC 1652. (1) by striking out in subsections (a) and (d) of section 1652 "he" and "wife" and inserting in lieu thereof "such individual" and "spouse", respectively; 38 USC 1661. (2) by striking out in section 1661(a) "his" and "he" each time they appear and inserting in lieu thereof "the veteran's" and "the veteran", respectively; (3) by striking out in subsections (a), (b), and (d) of section 38 USC 1662. 1662 "his" and "he" each time they appear and inserting in lieu thereof "the veteran's" and "the veteran", respectively; 38 USC 1663. (4) by striking out in section 1663 "he" each time it appears and inserting in lieu thereof "the Administrator"; 38 USC 1670. (5) by striking out in section 1670 "him" each time it appears and inserting in lieu thereof "the veteran"; 38 USC 1671. (6) by striking out in section 1671 "he" the first time it appears and inserting in lieu thereof "the Administrator", by striking out "he" the second time it appears and inserting in lieu thereof "the veteran or person", and by striking out "his" each time it appears and inserting in lieu thereof "the veteran's or person's"; 38 USC 1673. (7) by striking out in section 1673(a) "he" and "his" and inserting in lieu thereof "the Administrator" and "the veteran's", respectively; 38 USC 1674. (8) by striking out in section 1674 "his" and "he" each time they appear and inserting in lieu thereof "the veteran's" and "the Administrator", respectively; PAGENO="0917" 3537 PUBLIC LAW 94-502-_OCT. 15, 1976 90 STAT. 2389 (9) by striking out in section 1676 "his" and "he" and inserting 38 Usc 1676. in lieu thereof "the Administrator's" and "the Administrator", respectively; (10) by striking out in section 1681(a) "his" and inserting in 38 USC 1681. lieu thereof "the veteran's"; (11) by striking out in section 1685(c) "he" and "his" each 38 usc 1685. time they appear and inserting in lieu thereof "the Administrator" and "the veteran's", respectively; (12) by striking out in section 1691(a) "his" and "he" each 38 usc 1691. time they appear and inserting in lieu thereof "the veteran's" and "the veteran", respectively; (13) by striking out in section 1696(a) "he" and inserting in 38 usc 1696. lieu thereof "the Administrator"; and (14) by striking out in subsections (a) and (b) of section 1698 38 usc 1698. (as redesignated by section 211(3) of this Act) "he" and "his" and inserting in lieu thereof "the Administrator" and "such person's", respectively. TITLE Ill-CHApTER 35 SURVIVORS' AND DEPENDENTS' EDUCATIONAL ASSISTANCE RATE AND PROGRAM ADJUSTMENTS SEC. 301. Chapter 35 of title 38, United States Code, is amended- (1) by striking out in section 1732(b) "$217" and inserting in 38 USC 1732. lieu thereof "$235"; and (2) by amending subsection (a) of section 1742 to read as 38 USC 1742. follows: "(a) While the eligible person is enrolled in and pursuing a full- time course of special restorative training, the parent or guardian shall be entitled to receive on behalf of such person a special training allowance computed at the basic rate of $292 per month. If the charcres for tuition and fees applicable to any such course are more than ~`92 per calendar month, the basic monthly allowance may be increased by the amount that such charges exceed $92 a month, upon election by the parent or guardian of the eligible person to have such person s period of entitlement reduced by one day for each $9.76 that the special training allowance paid exceeds the basic monthly allowance.". SEC. 302. Section 1701(a) of title 38, United States Code, is amended 38 USC 1701. by adding at the end thereof the following new paragraphs: "(10) For the purposes of this chapter and chapter 36 of this title, "Institution of the term `institution of higher learning' means a college, university, higher learning." or similar institution, including a technical or business school, offering 38 usc 1770 et postsecondary level academic instruction that leads to an associate or seq. higher degree if the school is empowered by the appropriate State education authority under State law to grant an associate or higher degree. When there is no State law to authorize the granting of a degree, the school may be recognized as an institution of higher learn- ing if it is accredited for degree programs by a recognized accrediting agency. Such term shall also include a hospital offering educational programs at the postsecondary level without regard to whether the hospital grants a postsecondary degree. "(11) For the purposes of this chapter and chapter 36 of this title, "Standard the term `standard college degree' means an associate or higher degree college degree." awarded by (A) an institution of higher learning that is accredited 38 USC 1770 Ct as a collegiate institution by a recognized regional or national accredit- seq. ing agency; or (B) an institution of higher learning that is a `candi- date' for accreditation as that term is used by the regional or national PAGENO="0918" 3538 90 STAT. 2390 PUBLIC LAW 94-502-OCT. 15, 1976 accrediting agencies; or (C) an institution of higher learning upon completion of a course which is accredited by an agency recognized to accredit specialized degree-level programs. For the purpose of this section, the accrediting agency must be one recognized by the Com- missioner of Education under the provisions of section 1775 of this 38 Usc 1775. title.". SEC. 303. Section 1711 of title 38, United States Code, as amended- (1) by striking out in subsection (a) "thirty-six" and inserting in lieu thereof "45"; and (2) by striking out in subsection (b) "nine" and inserting in lieu thereof "12". SEC. 304. Section 1712 of title 38, United States Code, is amended- (1) by striking out in clauses (3) and (4) of subsection (a) "five" each time it appears and inserting in lieu thereof "8"; (2) by amending clause (5) of subsection (a) to read as follows: "(5) (A) if such person is enrolled in an educational institution regularly operated on the quarter or semester system and such period ends during a quarter or semester, such period shall be extended to the end of the quarter or semester; or "(B) if such person is enrolled in an educational institution operated on other than a quarter or semester system and such period ends after a major portion of the course is completed, such period shall be extended to the end of the course, or until 12 weeks have expired, whichever first occurs."; and (3) by repealing subsection (d) and redesignating subsections (e), (f), and (g), as subsections (d), (e), and (f), respectively. Application. SEC. 305. Section 1713 of title 38, United States Code, is amended to read as follows: "The parent or guardian ef a person or the eligible person if such person has attained legal majority for whom educational assistance is sought under this chapter shall submit an application to the Adminis- trator which shall be in such form and contain such information as the Administrator shall prescribe. If the Administrator finds that the person on whose behalf the application is submitted is an eligible per- son, the Administrator shall approve the application provisionally. The Administrator shall notify the parent or guardian or eligible person (if the person has attained legal majority) of the provisional approval or of the disapproval of the application.". SEC. 306. Section 1723(a) of title 38, United States Code, is amended- (1) by striking out at the end of clause (2) "or"; (2) by striking out at the end of clause (3) the period and inserting in lieu thereof"; or"; and (3) by adding at the end thereof a new clause (4) as follows: "(4) any independent study program except one leading to a standard college degree.". Discontinuance SEC. 307. Section 1724 of title 38, United States Code, is amended for unsatisfactory by inserting immediately after the first sentence thereof the follow- progress. ing: "Unless the Administrator finds there are mitigating circum- stances, progress will be considered unsatisfactory at any time an eligible person is not progressing at a rate that will permit such person to graduate within the approved length of the course based on the training time as certified to the Veterans' Administration.". computation. SEC. 308. Section 1732(c) of title 38, United States Code, is amended by adding a new paragraph (3) at the end thereof as follows: PAGENO="0919" 3539 PUBLIC LAW 94-502-OCr. 15, 1976 90 STAT. 2391 "(3) The monthly educational assistance allowance to be paid on behalf of an eligible person pursuing an independent study program which leads to a standard college degree shall be computed at the rate prescribed in section 1682(e) of this title.". SEC. 309. (a) The title of chapter 35 of title 38, United States Code, is amended by striking out "CHAPTER 35-WAR ORPHANS' AND WIDOWS' EDUCATIONAL ASSISTANCE" and inserting in lieu thereof "CHAPTER 35-SURVIVORS' AND DEPENDENTS' EDUCATIONAL ASSISTANCE" (b) The table of chapters at the beginning of title 38, United States Code, and the table of chapters at the beginning of part III of such title are each amended by striking out "35. War Orphans' and Widows' Education Assistance 1700" and inserting in lieu thereof "35. Survivors' and Dependents Educational Assistance 1700". (c) Section 1731 (a) is amended by striking out "section 1780" and 38 Usc 1731. inserting in lieu thereof "chapter 36". SEC. 310. Chapter 35 of title 38, United States Code, is amended- (1) by striking out in section 1700 "widows", "wives", and "his" 38 U5C 1700. each time they appear and inserting in lieu thereof "surviving spouses", "spouses", and "the veteran's", respectively; (2) by striking out in section 1701 (a) "widow" and "wife" 38 USC 1701. each time they appear and inserting in lieu thereof "surviving spouse" and "spouse", respectively; (3) by striking out in section 1701(b) "his" and inserting in lieu thereof "the person's" and by striking out "himself"; (4) by striking out in section 1701 (c) "his" each time it appears and inserting in lieu thereof "such person's" and by striking out "himself"; (5) by striking out in section 1701(d) "he" each time it appears and inserting in lieu thereof "such person"; (6) by striking out in section 1711(b) "she" the first time it 38 USC 1711. appears and inserting in lieu thereof "the spouse", by strikrn? out "her" each time it appears and inserting in lieu thereof `such person's", and by striking out "he or she" each time it appears and inserting in lieu thereof "such person"; (7) by striking out in section 1712(a) "him", "his", and "he" 38 U5C 1712. each time they appear and inserting in lieu thereof "the person", "the person's", and "the person", respectively; (8) by striking out in section 1712(c) "him", "he", "his" each time they appear and inserting in lieu thereof "such person", "such person", and "such person's", respectively; (9) by striking out in subsections (e) and (f) of section 1712 (as redesignated by section 304(3) of this Act) "her" and "he" and inserting in lieu thereof "the" and "such person", respectively; (10) by striking out in section 1720(a) "his" each time it 38 USC 1720. appears and inserting in lieu thereof "such person's"; (11) by striking out in section 1721 "he" and inserting in lieu 38 U5C 1721. thereof "the Administrator"; PAGENO="0920" 3540 90 STAT. 2392 38 Usc 1723. 38 Usc 1724. 38 Usc 1731. 38 Usc 1733. 38 Usc 1734. 38 Usc 1736. 38 Usc 1741. 38 Usc 1743. 38 Usc 1761. 38 Usc 1763. Post-Vietnam Era Veterans' Educational Assistance Act of 1977. 38 Usc 1601 note. "Eligible veteran." PUBLIC LAW 94-502-OCT. 15, 1976 (12) by striking out in section 1723 (a) "he" and "his" and inserting in lieu thereof "the Administratot" and "the person's", respectively; (13) by striking out in section 1723(c) "his" and "he" and inserting in lieu thereof "the Administrator's" and "the Admin- istrator', respectively; (14) by striking out in section 1723(d) "his" each time it appears and inserting in lieu thereof "such person's"; (15) by striking out in section 1724 "he" the first time it appeal-s and inserting in lieu thereof "such person", by striking out "his" each time it appears and inserting in lieu thereof "the person's", and by striking out "he" the second time it appears and inserting in lieu thereof "the Administrator"; (16) by striking out in section 1731(b) "his" and "he" and inserting in lieu thereof "the per-son's" and "the person", respectively; (17) by striking out in section 1733(a) "wife or widow" and "she" and inserting in lieu thereof "spouse or surviving spouse" and "such spouse", respectively; (18) by striking out in section 1733(b) "he" and inserting in lieu thereof "such person"; (19) by striking out in section 1734(b) "wife or widow" and inserting in lieu thereof "spouse or surviving spouse"; (20) by striking out in section 1736 "he" and inserting in lieu thereof "the Administrator"; (21) by striking out in section 1741(b) "he" and inserting in lieu thereof "the Administrator"; (22) by striking out in subsections (a) and (b) of section 1743 "his" and "he" each time they appear and inserting in lieu thereof "the Administrator's" and "the Administrator", respectively; (23) by striking out in section 1761(a) "he" and inserting in lieu thereof "the Administrator"; and (24) by striking out in section 1763 "his" and inserting in lieu thereof "such person's". TITLE IV_POST-VIETNAM ERA VETERANS' EDUCATIONAL ASSISTANCE ACT SEC. 401. This title may be cited as the "Post-Vietnam Era Vet- ei-ans' Educational Assistance Act of 1977". Sicc. 402. Section 1652 of title 38, United States Code, is amended- (1) by amending paragraph (1) of subsection (a) to read as follows: "(1) The term `eligible veteran' means any veteran who- "(A) served on active duty for a period of more than 180 days, any part of which occurred after January 31, 1955, and before January 1, 1977, and was discharged or released therefrom under conditions other than dishonorable; or "(B) contracted with the Armed Forces and was enlisted in or assigned to a reserve component prior to January 1, 1977, and as a result of such enlistment or assignment served on active duty for a period of more than 180 days, any part of which commenced within 12 months after January 1, 1977, and was discharged or released from such active duty under conditions other than dis- honorable; or PAGENO="0921" 3541 PUBLIC LAW 94-502--OCT. 15, 1976 90 STAT. 2393 "(C) was discharged or released from active duty, any part of which was performed after January 31, 1955, and before Jan- uary 1, 1977, or following entrance into active service from an enlistment provided for under clause (B) of this paragraph, because of a service-connected disability."; and (2) by inserting in subsection (a) (2) "or (B)" after "para- graph (1)(A)". SEC. 403. (a) Section 1661(a) of title 38, United States Code, is amended by adding at the end thereof a new sentence as follows: "In the case of any person serving on active duty on December 31, 1976, or a person whose eligibility is based on section 1652(a) (1) (B) of 38 USC 1652. this chapter, the ending date for computing such person's entitlement shall be the date of such person's first discharge or release from active duty after December 31, 1976.". (b) Section 1662 of title 38, United States Code, is amended by inserting at the end thereof the following new subsection: "(e) No educational assistance shall be afforded any eligible vet- eran under this chapter or chapter 36 of this title after December 31, 38 USC 1770 et 1989.". seq. SEC. 404. Part III of title 38, United States Code, is amended by inserting immediately after chapter 31 of such title a new chapter as follows: "CHAPTER 32-POST-VIETNAM ERA VETERANS' EDUCATIONAL ASSISTANCE "SUBCHAPTER I-PURPOSE; DEFINITIONS "Sec. "1601. Purpose. "1602. Definitions. "SUBCHAPTER Il-ELIGIBILITY; CONTRIBUTIONS; AND MATCHING FUND "1621. Eligibility. "1622. Contributions; matching fund. "1623. Refunds of contributions upon disenroliment. "1624. Death of participant. "1625. Discharge or release under conditions which would bar use of benefits. "SUBCHAPTER Ill-ENTITLEMENT; DURATION "1631. Entitlement; loan eligibility. "1632. Duration; limitations. "SUBCHAPTER IV-ADMINISTRATION "1641. Requirements. "1642. Reporting requirements. "1643. Deposits; reports. "Subchapter I-Purpose; Definitions "~ 1601. Purpose 38 USC 1601. "It is the purpose of this chapter (1) to provide educational assist- ance to those men and women who enter the Armed Forces after December 31, 1976, (2) to assist young men and women in obtaining an education they might not otherwise be able to afford, and (3) to promote and assist the all volunteer military program of the United States by attracting qualified men and women to serve in the Armed Forces. 18-226 0-77 -59 (Pt.4) PAGENO="0922" 3542 90 STAT. 2394 PUBLIC LAW 94-502-OCT. 15, 1976 38 Usc 1602. "~ 1602. Definitions "For the purposes of this chapter- "(1) (A) The term `eligible veteran' means any veteran who (i) initially entered military service on or after January 1, 1977, served on active duty for a period of more than 180 days commencing on or after such date, and was discharged or released therefrom under con- ditions other than dishonorable, or (ii) initially entered military service on or after January 1, 1977, and was discharged or released from active duty after such date for a service-connected disability. "(B) The requirement of discharge or release, prescribed in sub- paragraph (A), shall be waived in the case of any participant who has completed his or her first obligated period of active duty (which began after December 31, 1976) or 6 years of active duty (which began after December 31, 1976), whichever period is less. "(C) For the purposes of subparagraphs (A) and (B), the term `active duty' does not include any period during which an individual (i) was assigned full time by the Armed Forces to a civilian institu- tion for a course of education which was substantially the same as established courses offered to civilians, (ii) served as a cadet or mid- shipman at one of the service academies, or (iii) served under the pro- visions of section 511(d) of title 10 pursuant to an enlistment in the Army National Guard or the Air National Guard, or as a Reserve for service in the Army Reserve, Naval Reserve, Air Force Reserve, Marine Corps Reserve, or Coast Guard Reserve. "(2) The terms `program of education' and `educational institution' shall have the same meaning ascribed to them in sections 1652(b) and 38 U5C 1652. 1652(c),respectively, of this title. "(3) The term `participant' is a person who is participating in the educational benefits program established under this chapter. "Subchapter TI-Eligibility; Contributions; and Matching Fund 38 U5C 1621. "~ 1621. Eligibility "(a) Each person entering military service on or after January 1, 1977, shall have the right to enroll in the educational benefits program provided by this chapter (hereinafter in this chapter referred to as the `program' except where the text indicates otherwise) at any time during such person's service on active duty. When a person elects to enroll in the program, such person must participate for at least 12 consecutive months before disenrolling or suspending participation. "(b) The requirement for 12 consecutive months of participation required by subsection (a) of this section shall not apply when (1) the participant suspends participation or disenrolls from the program because of personal hardship as defined in regulations issued jointly by the Administrator and the Secretary of Defense (hereinafter in this chapter referred to as the `Secretary'), or (2) the participant is discharged or released from active duty. "(c) A participant shall be permitted to suspend participation or disenroll from the program at the end of any 12-consecutive- month period of participation. If participation is suspended, the participant shall be eligible to make additional contributions to the program under such terms and conditions as shall be prescribed by regulations issued jointly by the Administrator and the Secretary. "(d) If a participant disenrolls from the program, such participant forfeits any entitlement to benefits under the program except as pro- vided in subsection (e) of this section. A participant who disenrolls from the program is eligible for a refund of such participant's contri- butions as provided in section 1623 of this title. PAGENO="0923" 3543 PUBLIC LAW 94-502-OCT. 15, 1976 90 STAT. 2395 "(e) A participant who has disenrolled may be permitted to reen- roll in the program under such conditions as shall be prescribed jointly by the Administrator and the Secretary. "~ 1622. Contributions; matching fund 38 Usc 1622. "(a) Each person electing to participate in the program shall agree to have a monthly deduction made from such person's military pay. Such monthly deduction shall be in any amount not less than $50 nor more than $75 except that the amount must be divisible by 5. Any such amount contributed by the participant or contributed by the Secretary pursuant to subsection (c) of this section shall be deposited in a deposit fund account entitled the `Post-Vietnam Era Veterans Edu- cation Account' (hereinafter in this chapter referred to as the `fund') to be established in the Treasury of the United States. Contributions made by the participant shall be limited to a maximum of $2,700. "(b) Except as otherwise provided in this chapter, each monthly contribution made by a participant under subsection (a) shall entitle the participant to matching funds from the Veterans' Administration at the rate of $2 for each $1 contributed by the participant. "(c) The Secretary is authorized to contribute to the fund of any participant such contributions as the Secretary deems necessary or appropriate to encourage persons to enter or remain in the Armed Forces. The Secretary is authorized to issue such rules and regula- Rules and tions as the Secretary deems necessary or appropriate to implement regulations. the provisions of this subsection. "~ 1623. Refunds of contributions upon disenrollment 38 USC 1623. "(a) Contributions made to the program by a participant may be refunded only after the participant has disenrolled from the program or as provided in section 1624. "(b) If a participant disenrolls from the program prior to dis- charge or release from active duty, such participant's contributions will be refunded on the date of the participant's discharge or release from active duty or within 60 days of receipt of notice by the Admin- istrator of the participant's discharge or disenroilment, except that refunds may be made earlier in instances of hardship or other good reason as prescribed in regulations issued jointly by the Administrator and the Secretary. "(c) If a participant disenrofls from the program after discharge or release from active duty, the participant's contributions shall be refunded within 60 days of receipt of an application for a refund from the participant. "(d) In the event the participant (1) dies while on active duty, (2) dies after discharge or release from active duty, or (3) disenrolls or is disenrolled from the program without having utilized any entitle- ment, the participant may have accrued under the program, or, in the event the participant utilizes part of such participant's entitlement and disenrolls or is disenrolled from the program, the amount con- tributed by the Secretary under the authority of section 1622(c) remaining in the fund shall be refunded to the Secretary. "~ 1624. Death of participant 38 USC 1624. "(a) If a participant dies, the amount of such participant's unused contributions to the fund shall be paid (1) to the beneficiary or bene- ficiaries designated by such participant under such participant's Servicemen's Group Life Insurance policy, or (2) to the participant's estate if no beneficiary has been designated under such policy or if the participant is not insured under the Servicemen's Group Life Insur- ance program. PAGENO="0924" 3544 90 STAT. 2396 PUBLIC LAW 94-502-OCT. 15, 1976 "(b) If a participant dies after having been discharged or released from active duty and before using any or all of the contributions which the participant made to the fund, such unused contributions shall be paid as prescribed in subsection (a) of this section. 38 Usc 1625. "~ 1625. Discharge or release under conditions which would bar the use of benefits "If a participant in the program is discharged or released from active duty under dishonorable conditions, such participant is auto- matically disenrolled and any contributions made by such participant shall be refunded to such participant on the date of such participant's discharge or release from active duty or within 60 days from receipt of notice by the Administrator of such discharge or release, whichever is later. "Subchapter 111-Entitlement; Duration 38 usc 1631. "~ 1631. Entitlement; loan eligibility "(a) (1) A participant shall be entitled to a maximum of 36 monthly benefit payments (or their equivalent in the event of part- time benefit payments). "(2) The amount of the monthly payment to which any eligible veteran is entitled shall be ascertained by (A) adding all contributions made to the fund by the eligible veteran, (B) multiplying the sum by 3, (C) adding aTi contributions made to the fund for such veteran by the Secretary, and (D) dividing the sum by the lesser of 36 or the number of months in which contributions were made by such veteran. "(3) Payment of benefits under this chapter may be made only for periods of time during which an eligible veteran is actually enrolled in and pursuing an approved program of education and, except as provided in paragraph (4), only after an eligible veteran has been discharged or released from active duty. "(4) Payment of benefits under this chapter may be made after a participant has completed his or her first obligated period of active duty (which began after December 31, 1976), or 6 years of active duty (which began after December 31, 1976), whichever period is less. "(b) Any enlisted member of the Armed Forces participating in the program shaTl be eligible to participate in the Predischarge Education Program (PREP),authorized by subchapter VI of chapter 38 usc 1681. 34 of this title, during the last 6 months of such member's first enlistment. "(c) When an eligible veteran is pursuing either a program of education under this chapter by correspondence or a program of flight training, such eligible veteran's entitlement shall be charged at the rate of 1 month's entitlement for each month of benefits paid to the eligible veteran (computed on the basis of the formula provided in subsection (a) (2) of this section). "(d) Eligible veterans participatingin the program shall be eligible for education loans authorized by subchapter III of chapter 36 of this *38 usc 1798. title in such amounts and on the same terms and conditions as provided in such subchapter, except that the term `eligible veteran' as used in such subchapter shall be deemed to include `eligible veteran' as defined in this chapter. 38 usc 1632. "~ 1632. Duration; limitations "No educational assistance benefits shall be afforded an eligible veteran under this chapter beyond the date of 10 years after such veteran's last discharge or release from active duty. In the event an PAGENO="0925" 3545 PUBLIC LAW 94-502-OCT. 15, 1976 90 STAT. 2397 eligible veteran has not utilized any or all of such veteran's entitlement by the end of the 10-year period, such eligible veteran is automatically disenrolled and any contributions made by such veteran remaining in the fund shall be refunded to the veteran following notice to the veteran and an application by the veteran for such refund. If no application is received within 1 year from date of notice, it will be presumed for the purposes of subsection (a) of section 725s of title 31, that the individual's whereabouts is unknown and the funds shall be transferred as directed in the last proviso of that subsection. "Subchapter IV-Administratjon "~ 1641. Requirements 38 Usc 1641. "The provisions of sections 1670, 1671, 1673, 1674, 1676, 1677, 1681(c), 1683, 1696, and 1698 of this title and the provisions of chapter 36 of this title, with the exception of sections 1777, 1780(c), and 1787, 38 USC 1770 et shall be applicable to the program. seq. "~ 1642. Reporting requirements 38 USC 1642. "The Administrator and the Secretary shall, within 90 days after Report to the date of enactment of this chapter, submit to the Committees on congressional Veterans' Affairs of the Senate and House of Representatives a joint committees. report containing their respective plans for implementation of the program provided for in this chapter. The Administrator and the Secretary shall submit to such committees a report each year detailing the operations of the program during the preceding year. The first such annual report shall be submitted 15 months after the date of enactment of this section. "~ 1643. Deposits; reports 38 USC 1643. "Deductions made by the Department of Defense from the military pay of any participant shall be promptly transferred to the Admninis- trator for deposit in the fund. The Secretary shall also submit to the Report to Administrator a report each month showing the nanie, service number, Administrator. and the amount of the deduction made from the military pay of each initial enrollee, any contribution made by the Secretary pursuant to section 1622(c), as well as any changes in each participant's enrollment and/or contribution. The report shall also include any additional information the Administrator and the Secretary deem necessary to administer this program. The Administrator shall maintain accounts showing contributions made to the fund by individual participants and by the Secretary as well as disbursements made from the fund in the form of benefits.". SEC. 405. The table of chapters at the beginning of title 38, United States Code, and the table of chapters at the beginning of part 111 of such title are each amended by inserting immediately below "31. VOCATIONAL REHABILITATION 1501" the following: "32. POST-VIETNAM ERA VETERANS' EDUCATIONAL ASSISTANCE 1601". SEC. 406. The provisions of this title shall become effective on Effective date. January 1, 1977. 38 USC 1601 SEC. 407. Section 725s(b) of title 31, United States Code, is amended note. by adding at the end thereof the following: "(84) Post-Vietnam Era Veterans Education Account, Veter- ans' Administration." SEC. 408. (a) (1) No individual on active duty in the Armed Forces 38 USC 1621 may initially enroll in the educational assistance program provided note. PAGENO="0926" 3546 90 STAT. 2398 PUBLIC LAW 94-502-OCT. 15, 1976 for in chapter 32 of title 38, TJnited States Code (as added by section 404 of this Act) after December 31,1981, unless- Recommendation (A) before June 1, 1981, the President submits to both Houses to Congress. of Congress a written recommendation that such program con- tinue to be open for new enrollments; and (B) before the close of the 60-day period after the day on which the President submits to Congress the recommendation described in subparagraph (A), neither the House of Representatives nor the Senate adopts, by an affirmative vote of a majority of those present and voting in that House, a resolution which in substance disapproves such recommendation. (2) For purposes of computing the 60-day period referred to in paragraph (1) (B), there shall be excluded- (A) the days on which either House is not in session because of an adjournment of more than 3 days to a day certain or an adjournment of the Congress sine die, and (B) any Saturday and Sunday, not excluded under the pre- ceding subparagraph, when either House is not in session. The recommendation referred to in paragraph (1) (A) shall be deliv- ered to both Houses of Congress on the same day and shall be delivered to the Clerk of the House of Representatives if the House is not in session and to the Secretary of the Senate if the Senate is not in session. (b) If new enrollments after December 31, 1981, in the educational assistance program provided for in such chapter 32 are authorized after the application of the provisions of subsection (a), then effec- tive January 1, 1982, section 1622(b) of title 38, United States Code, is amended by striking out "Veterans' Administration" and inserting in lieu thereof "Department of Defense." TITLE V-CHAPTER 36 EDUCATION LOAN AND PROGRAM ADMINISTRATION AMENDMENTS SEc. 501. Chapter 36 of title 38, United States Code, is amended- 38 USC 1786. (1) by striking out in section 1786(a) (2) "$270" and inserting in lieu thereof "$292"; and (2) by amending the table contained in paragraph (1) of section 1787(b) to read as follows: "Column I Column Column Column Column V II III IV Periods of training No de- One de- Two de- More than two pendents pendent pendents dependents The amount in column IV, plus the fol- lowing for each de- pendent in excess of two: First 6 months $212 $238 $260 $11 Second 6 months~__ - 159 185 207 11 Third 6 months 106 132 154 11 Fourth and any suc- ceeding 6-month periods 53 79 101 11". PAGENO="0927" 3547 PUBLIC LAW 94-502-OCT. 15, 1976 90 STAT. 2399 SEc. 502. (a) Section 1798 of title 38, United States Code, is amended- (1) by striking out in subsection (b) (3) "$270" and "$600" and inserting in lieu thereof "$292" and "$1,500", respectively; and (2) by amending clause (3) of subsection (d) to read as follows: "(3) shall provide that the loan shall bear interest, on the unpaid balance of the loan, at a rate prescribed by the Admin- istrator, at the time the loan is contracted for which rate shall be comparable to the rate of interest charged students at such time on loans insured by the Commissioner of Education, Department of Health, Education, and Welfare, under part B of title IV of the Higher Education Act of 1965, but in no event shall the rate 20 USC 1071 so prescribed by the Administrator exceed the rate charged stu- dents on such insured loans, and shall provide that no interest shall accrue prior to the beginning date of repayment; and". (b) The amendments made by subsection (a) shall be effective with 38 Usc 1798 respect to loans made under section 1798 of title 38, United States note. Code, on and after October 1, 1976. Sxc. 503. Section 1774 of title 38, United States Code, is amended- (1) by adding at the end of subsection (a) thereof the follow- ing new sentence: "The Administrator may also reimburse such agencies for work performed by their subcontractors where such work has a direct relationship to the requirements of chapter 32, 34, 35, or 36 of this title, and has had the prior approval of the Ante, p. 2393. Administrator."; and 38 Usc 1651, (2) by amending subsection (b) to read as follows: 1700, 1770. "(b) The allowance for administrative expenses incurred pursuant to subsection (a) of this section shall be paid in accordance with the following formula: "Total salary cost reimbursable Allowable for administrative expense under this section $5,000 or less $600. Over $5,000 but not exceeding $10,000 $1,080. Over $10,000 but not exceeding $35,000 $1,080 for the first $10,000 plus $1,000 for each additional $5,000 or fraction thereof. Over $35,000 but not exceeding $40,000 $6,535. Over $40,000 but not exceeding $75,000 $6,535 for the first $40,000 plus $865 for each additional $5,000 or fraction thereof. Over $75,000 but not exceeding $80,000 $12,960. Over $80,000 $12,960 for the first $80,000 plus $755 for each additional $5,000 or fraction thereof.". Snc. 504. Section 1775 of title 38, United States Code, is amended- (1) by striking out the period at the end of subsection (a) and inserting in lieu thereof "which must be certified as true and cor- rect in content and policy by an authorized representative of the school. The catalog or bulletin must specifically state its progress requirements for graduation and must include as a minimum the information required by sections 1776(b) (6) and (7) of thls title."; and (2) by inserting before the period in the first sentence of sub- section (b) the ~llowing: "and must include as a minimum (except for attendance) the requirements set forth in section 1776(c) (7) of this title". PAGENO="0928" 3548 90 STAT. 2400 PUBLIC LAW 94-502-OCT. 15, 1976 SEC. 505. Section 1780 (a) of title 38, United States Code, is amended- (1) by striking out at the end of clause (1) "or"; (2) by striking out the period at the end of clause (2) and inserting in lieu thereof a semicolon; and (3) by inserting immediately after clause (2) the following new clauses: "(3) to any eligible veteran or person for auditing a course; "(4) to any eligible veteran or person for a course for which the grade assigned is not used in computing the requirements for grad- uation including a course from which the student withdraws unless the Administrator finds there are mitigating circumstances; or "(5) to any eligible veteran or person for pursuit of a program of education exclusively by correspondence as authorized under 38 USC 1786. section 1786 of this title or for the pursuit of a correspondence portion of a combination correspondence-residence course lead- ing to a vocational objective where the normal period of time required to complete such correspondence course or portion is less the 6 months. A certification as to the normal period of time required to complete the course must be made to the Administra- tor by the educational institution.". SEC. 506. The last sentence of section 1780(a) of title 38, United States Code, is amended to read as follows: "Notwithstanding the fore- going, the Administrator may, subject to such regulations as the Administrator shall prescribe, continue to pay allowances to eligible veterans and eligible persons enrolled in courses set forth in clause (1) or (2) of this subsection- "(A) during periods when the schools are temporarily closed under an established policy based upon an Executive order of the President or due to an emergency situation, and such periods shall not be counted as absences for the purposes of clause (2); "(B) during periods between consecutive school terms where such veterans or persons transfer from one approved educational institution to another approved educational institution for the purpose of enrolling in and pursuing a similar course at the sec- ond institution if the period between such consecutive terms does not exceed 30 days, but such periods shall be counted as absences for the purposes of clause (2) ; or "(C) during periods between a semester, term, or quarter where the educational institution certifies the enrollment of the eligible veteran or eligible person on an individual semester, term, or quarter basis if the interval between such periods does not exceed 1 full calendar month, but such periods shall be counted as absences for the purposes of clause (2) .". SEC. 507. Section 1784(a) of title 38, United States Code, is amended by adding at the end thereof the following: "The date of interruption or termination will be the last date of pursuit or, in the case of corre- spondence training, the last date a lesson was serviced by the school.". SEC. 508. Section 1784(b) of title 38, United States Code, is amended by striking out "$3" and "$4" and inserting in lieu thereof "$5" and "$6", respectively. SEC. 509. (a) Section 1788(a) of title 38, United States Code, is amended- (1) by striking out the semicolon at the end of clause 1 and inserting in lieu thereof a comma and the following: "but if such PAGENO="0929" 3549 PUBLIC LAW 94-502-OCT. 15, 1976 90 STAT. 2401 course is approved pursuant to section 1775 of this title, then 27 38 Usc 1775. hours per week of attendance, with no more than 21/2 hours of rest period per week allowed and excluding supervised study, shall be considered full time;"; and (2) by striking out the semicolon at the end of clause 2 and inserting in lieu thereof a comma and the following: "but if such course is approved pursuant to section 1775 of this title, then 22 hours per week net of instruction (excluding supervised study), which may include customary intervals not to exceed ten minutes between hours of instruction, shall be considered full time;" (b) Section 1789 of title 38, United States Code, is amended- (1) by striking out "or" at the end of clause (4) in subsection (b); (2) by striking out the period at the end of clause (5) in sub- section (b) and inserting in lieu thereof"; or"; (3) by adding at the end of subsection (b) a new clause (6) to read as follows: "(6) any course offered by an educational institution under a contract with the Department of Defense that (A) is given on, or immediately adjacent to, a military base; (B) is available only to active duty military personnel and/or their dependents and (C) has been approved by the State approving agency of the State in which the base is located."; and (4) by adding at the end thereof a new subsection (e) as follows: "(c) Notwithstanding the provisions of subsection (b) (1), (2), (3), or (4) of this section, the provisions of subsection (a) shall apply to any course offered by a branch or extension of- "(1) a public or other tax-supported institution where the branch or extension is located outside of the area of the taxing jurisdiction providing support to such institution; or "(2.) a proprietary profit or proprietary nonprofit educational institution where the branch or extension is located beyond the normal commuting distance of such institution.". SEC. 510. Section 1790(c) of title 38, United States Code, is amended to read as follows: "(c) Notwithstanding any other provision of law, the records and accounts of educational institutions pertaining to eligible veterans or eligible persons who received educational assistance under this chapter or chapter 31, 32, 34, or 35 of this title, as well as the records of other 38 U5C 1501. students which the Administrator determines necessary to ascertain Ante, p. 2393. institutional compliance with the requirements of such chapters, shall 38 USC 1651, be available for examination by duly authorized representatives of the 1700. Government.". SEC. 511. Subchapter II of chapter 36, United States Code, is amended- (1) by striking out section 1793 and inserting in lieu thereof the following: "~ 1793. Compliance surveys 38 Usc 1793. "The Administrator shall conduct an annual compliance survey of each institution offering one or more courses approved for the enroll- ment of eligible veterans or persons where at least 300 veterans or persons are enrolled under provisions of this title or where the course does not lead to a standard college degree. Such compliance survey PAGENO="0930" 3550 90 STAT. 2402 PUBLIC LAW 94-502-OCT. 15, 1976 shall assure that the institution and approved courses are in com- pliance with all applicable provisions of chapters 31, 34, 35, and 36 of this title. The Administrator shall assign at least one education com- pliance specialist to work on compliance surveys in any year for each 40 compliance surveys required to be made under this section."; and (2) by striking out in the table of sections at the beginning of chapter 36 of such title "1793. Institutions listed by Attorney General." and inserting in lieu thereof "1793. Compliance surveys.". Advertising, SEC. 512. Section 1796 of title 38, United States Code, is amended- sales, and (1) by redesignating subsections (b) and (c) as (c) and (d), enrollment, respectively; and (2) by inserting after subsection (a) a new subsection (b) as follows: "(b) To ensure compliance with this section, any institution offer- ing courses approved for the enrollment of eligible persons or veterans shall maintain a complete record of all advertising, sales, or enroll- ment materials (and copies thereof) utilized by or on behalf of the institution during the preceding 12-month period. Such record shall be available for inspection by the State approving agency or the Administrator. Such materials shall include but are not limited to any direct mail pieces, brochures, printed literature used by sales persons, films, video tapes, and audio tapes disseminated through broadcast media, material disseminated through print media, tear sheets, leaflets, handbills, fliers, and any sales or recruitment manuals used to instruct sales personnel, agents, or representatives of such institution.". SEC. 513. (a) Chapter 36 of title 38, United States Code, is amended- 38 USC 1771. (1) by striking out in section 1771(a) "his" and inserting in lieu thereof "such"; 38 Usc 1775. (2) by striking out in section 1775(a) "he" and inserting in lieu thereof "the Commissioner"; 38 usc 1777. (3) by striking out in subsections (b) and (c) of section 1777 "he", "him", "his" each time they appear and inserting in lieu thereof "the veteran or person", "the veteran or person", and "such veteran's or person's", respectively; 38 USC 1779. (4) by striking out in section 1779(b) "his" and inserting in lieu thereof "the Administrator's"; 38 USC 1780. (5) by striking out in subsections (a) and (b) of section 1780 "his", "wife or widow", and "wife's or widow's" each time they appear and inserting in lieu thereof "such veteran's or person's", "spouse or surviving spouse", and "spouse's or surviving spouse's", respectively; (6) by striking out in subsections (c) and (d) of section 1780 "his" and "lie" each time they appear and inserting in lieu thereof "such veteran's or person's" and "the veteran or person", respectively; (7) by inserting "may" immediately before "need" in section 1780(d) (1); (8) by inserting immediately after the fourth sentence in sec- tion 1780(d) (2) the following new sentence: "An advance pay- PAGENO="0931" 3551 PUBLIC LAW 94-502-OCT. 15, 1976 90 STAT. 2403 meiit may not be made under this subsection to any veteran or person unless the veteran or person requests such payment and the Administrator finds that the educational institution at which such veteran or person is accepted or enrolled has agreed to, and can satisfactorily, carry out the provisions of paragraphs 5(B) and (C) and (6) of this subsection." (9) by striking out section 1780(e) and the heading thereto; 38 Usc 1780. (10) by redesignating subsections (f), (g), and (Ii) of section 1780 as subsections (e), (f), and (g), respectively, and by adding at the end of such subsection (g) (as so redesignated) the follow- ing: "Subject to such reports and proof as the Administrator may require to show an eligible veteran's or eligible person's enroll- ment in and satisfactory pursuit of such person s program, the Administrator is authorized to withhold the final payment of benefits to such person until the required proof is received and the amount of the final payment is appropriately adjusted."; (11) by striking out in section 1780(f) "him" and inserting in lieu thereof "such veteran or person"; (12) by striking out in section 1780(h) "lie" the first time it appears and inserting in lieu thereof "the Administrator" and by striking out "he" the second time it appears and inserting in lieu thereof "the veteran or person"; (13) by striking out in section 1781 "him" and inserting in lieu 38 USC 1781. thereof "such person"; (14) by striking out in section l783(a) "his" and inserting in 38 USC 1783. lieu thereof "such officer's or employee's"; (15) by striking out in section 1783(b) "he" the first time it appears and inserting in lieu thereof "such person" and by strik- ing out "he" the second time it appears and inserting in lieu thereof "the Administrator". (16) by striking out in section 1783(d) "he" and inserting in lieu thereof "the Administrator"; (17) by striking out in subsections (a) and (b) of section 1784 38 USC 1784. "him" and inserting in lieu thereof "the Administrator"; (18) by striking out in subsections (a), (b), and (c) of section 1786 "wife and widow" and "his" each time they appear and inserting in lieu thereof "spouse or surviving spouse" and "such veteran's or spouse's", respectively; (19) by striking out in subsections (a), (b). and (d) of section 1790 "he" each time it appears and inserting in lieu thereof "the Administrator"; (20) by striking out in subsections (a), (b), and (c) of section 1791 "his" and "he" each time they appear and inserting in lieu thereof "the veteran's or person's" and "the Administrator", respectively; (21) by striking out in section 1794 "his" and inserting in lieu 38 USC 1794. thereof "the Administrator's". (22) by striking out in section l796(c) (as redesignated by 38 USC 1796. section 513(1) of this Act) "his" and inserting in lieu thereof "the Administrator's"; (23) by striking out in section 1798(b) (1) "he" and inserting 38 USC 1798. in lieu thereof "the veteran or person" and by striking out in see- tion l798(e) (1) "he" and inserting in lieu thereof "the Admin- istrator"; and PAGENO="0932" 3552 90 STAT. 2404 PUBLIC LAW 94-502-OCT. 15, 1976 38 Usc 1799. (24) by striking out in section 1799(d) "his" and inserting in lieu thereof "the Administrator's". Effective date. (b) The amendments made by paragraphs (7), (8), (9), and (10) 38 USC 1780 of subsection (a) shall take effect June 1, 1977, and shall apply with note, respect to educational assistance allowances and subsistence allowances paid under title 38, United States Code, for months after May 1977. TITLE VT-VETERANS' EMPLOYMENT ASSISTANCE PROVISIONS SEc. 601. (a) Section 2002 of title 38, United States Code, is amended by inserting "by a Deputy Assistant Secretary of Labor for Veterans' Employment, established by section 2002A of this title," after "promulgated and administered". (b) Chapter 41 of title 38, United States Code, is amended by- (1) adding after section 2002 a new section as follows: 38 usc 2002A. "~ 2002A. Deputy Assistant Secretary of Labor for Veterans' Employment "There is established within the Department of Labor a Deputy Assistant Secretary of Labor for Veterans' Employment, appointed by the President by and with the advice and consent of the Senate, who shall be the principal advisor to the Secretary of Labor with respect to the formulation and implementation of all departmental policies and procedures to carry out (1) the purposes of this chapter, 38 usc 2010, chapter 42, and chapter 43 of this title, and (2) all other Department 2021. of Labor employment, unemployment, and training programs to the extent they affect veterans."; and (2) amending the table of sections at the beginning of chapter 41 of such title by inserting "2002A. Deputy Assistant Secretary of Labor for Veterans' Employment. after "2002. Purposes.". Repeal. (c) Section 104(a) of the Emergency Jobs and Unemployment 38 usc 2002 Assistance Act of 1974 (Public Law 93-567) is repealed. note. SEC. 602. Section 2003 of title 38, United States Code, is amended- (1) by inserting in the fourth sentence "or by prime sponsors under the Comprehensive Employment and Training Act" after "programs administered by the Secretary"; (2) by striking out "and" at the end of clause (5) ; and (3) by rèdesignating clause (6) as clause (7) and inserting new clause (6) as follows: "(6) promote the participation of veterans in Comprehensive Employment and Training Act programs and monitor the imple- mentation and operation of Comprehensive Employment and Training Act programs to assure that eligible veterans receive special consideration when required; and". SEC. 603. Section 2006(a) of title 38, United States Code, is amended by inserting in the last sentence "each" after "shall". SEC. 604. Section 2007 of title 38, United States Code, is amended- (1) by striking out in subsection (a) (1) "his" and inserting in lieu thereof "such veteran's and eligible person's"; (2) by inserting in the second sentence of subsection (c) "and public service employment" after "occupational training"; and PAGENO="0933" 3553 PUBLIC LAW 94-502-OCT. 15, 1976 90 STAT. 2405 (3) by striking out in the last sentence of subsection (c) "or 2006" and inserting in lieu thereof ", 2006, or 2007(a)". SEC. 605. Section 2012 of title 38, United States Code, is amended by adding at the end thereof a new subsection (c) as follows: "(c) The Secretary shall include as part of the annual report required by section 2007(c) of this title the number of complaints filed pursuant to subsection (b) of this section, the actions taken thereOn and the resolutions thereof. Such report shall also include the number of contractors listing suitable employment openings, the nature, types, and number of positions listed and the number of veterans receiving priority pursuant to subsection (a) (2) of this section.". SEC. 606. Chapter 41 of title 38, United States Code, is amended- (1) by striking out in section 2003 "he" and "his" and inserting 38 USC 2003. in lieu thereof "the Secretary" and "such representative's", respectively; (2) by striking out in section 2004 "his" and inserting in lieu 38 usc 2004. thereof "such representative's" and by inserting "or eligible per- sons" after "eligible veterans"; (3) by striking out in section 2005 "he" and inserting in lieu 38 USC 2005. thereof "the Secretary"; and (4) by striking out in section 2008 "his" and "him" and 38 USC 2008. inserting in lieu thereof "the Secretary's" and "the Administra- tor", respectively. SEC. 607. Chapter 42 of title 38, United States Code, is amended- (1) by striking out in section 2011(2) "his" and inserting 38 USC 2011. in lieu thereof "the person's"; and (2) by striking out in the first sentence of section 2012(b) "his" 38 USC 2012. and inserting in lieu thereof "the contractor's". SEC. 608. Chapter 43 of title 38, United States Code, is amended- (1) by striking out in section 2021(a) (2) (B) "his" each time 38 USC 2021. it appears and inserting in lieu thereof "the employer's"; (2) by striking out in section 2021(b) (2) "his" and "he" and inserting in lieu thereof "the person's" and "the person", respec- tively; and (3) by striking out in the sixth sentence of section 2024(d) 38 USC 2054. "his" each time it appears and inserting in lieu thereof "such employer's". TITLE Vu-MISCELLANEOUS AND EFFECTIVE DATE Sxo. 701. Section 3101 (a) of title 38, United States Code, is amended by adding at the end thereof the following: "For the purposes of this subsection, in any case where a payee of an educational assistance allowance has designated the address of an attorney-in-fact as the payee's address for the purpose of receiving his or her benefit check and has also executed a power of attorney giving the attorney-in- fact authority to negotiate such benefit check, such action shall be deemed to be an assignment and is prohibited.". SEC. 702. Section 2108(1) (B) of title 5, United States Code, is amended by striking out "after January 31, 1955," and inserting in lieu thereof "any part of which occurred after January 31, 1955, and before the date of the enactment of the Veterans' Education and Employment Assistance Act of 1976,". PAGENO="0934" 3554 90 STAT. 2406 PUBLIC LAW 94-502-OCT. 15, 1976 Effective date. SEC. 703. (a) Sections 101, 201, 203, 207, 209, 301, 303, 304, 308,501, 38 USC 1504 502, 503 and 508 of this Act shall become effective on October 1, 1976. note. (b) ~ections 102, 104, 202, 204, 205(1), 205(2), 205(3), 208, 210, 211, 302, 305, 306, 309, 310, 506, 510, 511, and 513 (other than para- graphs (7), (8), (9), and (10) of subsection (a)) of this Act shall become effective on the date of the enactment of this Act. (c) Sections 103, 205(4), 206, 307, 504, 505, 507, 509, 512, ~tnd 701 and title VI of this Act shall become effective on December 1, 1t~76. Approved October 15, 1976. LEGISLATIVE HISTORY: SENATE REPORT No. 94-1243 (comm. on Veterans' Affairs). CONGRESSIONAL RECORD, Vol. 122 (1976): Oct. 1, considered and passed Senate; considered and passed House, amended; Senate concurred in House amendment. WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol 12, No. 43: Oct. 15, Presidential statement. Note.-A change has been made in the slip law format to provide for one.time preparation of copy to be used for publication of both slip laws and the United States Statutes at Large volumes. Comments from users are invited by the Office of the Federal Register, National Archives and Records Service, Washington, D.C. [~2O4O8. 0