Wednesday, October 19, 2011

The Death of Tuition Assistance

The end of the U.S. military's tuition assistance program may be at hand. Yesterday, the Marine Corps announced that annual benefits will be cut, from a maximum of $4500 a year, to $3500.

Additionally, the Corps is reducing payments per credit hour to $175 for undergraduate courses and $225 for graduate programs. However, the "real" TA cap for the majority of Marines will be only $875 per year, based on "analysis" that shows most participants take only 5-6 credit hours annually.

Changes in the Marine Corps TA program were made retroactive to 1 October. While the other services have not announced similar cuts, all are watching the USMC experiment and may unveil their own reductions in the coming months.

Currently, the Pentagon spends over $600 million a year on tuition assistance, which provides money for active-duty military members (along with guardsmen and reservists) to attend off-duty college classes. The program's price tag has more than doubled over the past decade, after the military raised the payment rate from 75% for each class, to 100%, with a cap of $750 per course.

There are signs that more cuts may be in the offing. Earlier this year, the Pentagon's chief of voluntary education, Carolyn Baker, said the current TA program is "unsustainable." Senator Tom Coburn (R-OK) has described TA as a "poor recruiting and retention tool," advocating a 90% reduction in the program. More recently, a Colorado Congressman asked DoD to consider a return to the 75% payment rate, which was in effect for decades. There is growing consensus in Congress (and the Pentagon) that TA must be cut, as the military faces hundreds of billions in budget cuts.

But the rush to gut TA may be premature--and short-sighted. Reducing (or eliminating) tuition assistance will force most military members to rely on their other education benefits program, notably the Post 9-11 GI Bill. That program is aimed at veterans who have left the service, paying full rates for tuition and a housing allowance, among other benefits.

Still, any shift to the GI Bill won't be cheap or cost-effective. Consider these numbers, announced at last week's meeting of the Colorado Advisory Council on Military Education:

- When it was signed into law three years ago, the Post 9-11 GI Bill was budgeted at $5 billion a year. But so many vets have entered the program, it is currently costing taxpayers $15 billion a year, and that tab is growing.

- Some participants see the program as little more than a benefit check. According to the Department of Veterans Affairs, one in five departing service members become full-time students under the GI Bill. But only 3% of those students stick around long enough to earn their degree. Grad rates for GI Bill participants are ten times lower than their civilian counter-parts.

- VA statistics show that 88% of GI Bill students drop out of school within their first year.

Based on those figures, the GI Bill is shaping up as a $15 billion a year boondoggle. Indeed, the program actually pays for "Fs." Students can flunk classes and still receive full benefits, although schools are now required to more closely monitor--and report--student performance.

As for that supposedly "inefficient" TA program::

- Thousands of military members receive their degree each year, using TA benefits.

- A typical bachelor's degree earned with TA benefits costs taxpayers about $40,000; the same four-year diploma, funded with the GI Bill, runs $100,000 (or more).

- Students using TA who fail a class must reimburse the military--a powerful incentive for military members to do well in class.

- TA participants remain on active-duty, providing valuable contributions to national defense. By comparison, most GI bill students have left active service, and the military will receive no direct benefit of their advanced education.

To be fair, both programs have their problems; you'll find fraud and waste in each. But it's rather interesting that TA is being cut, in favor of a "new" GI Bill that is shaping up as an educational and fiscal disaster. In light of skyrocketing costs and low graduation rates, the public and lawmakers should ask: just how much bang are we getting for that $15 billion a year?

Disclosure: Your humble correspondent is employed by a private, non-profit university that participates in both the tuition assistance and GI Bill programs. :

1 comment:

J.R. said...

Any opinion on whether the GI Bill and tuition assistance could be tweaked to either cut or eliminate support for for-profit schools?

For instance, the goal of the tuition assistance program is to make veterans more employable, or employable at higher salaries, but for-profits have some staggeringly bad numbers for graduate employment, and an incentive to pass you in order to keep getting your checks.

Those two items combined suggest that the gov't isn't getting its money's worth if it sends GIs there.