Having trouble viewing this email? View it as a web page.

School Partners/School Certifying Officials,

On October 12, 2022, the Department of Veterans Affairs (VA), published a Proposed Rule, “85/15 Rule Calculations, Waiver Criteria, and Reports”, through a Federal Register Notice. The Notice is 87 FR 61544. To leave comments, please use the following link: https://www.regulations.gov/document/VA-2022-VBA-0022-0001.

As a reminder, through the recent changes made by the Ensuring the Best Schools for Veterans Act of 2022 (PL 117-174), many schools (those with a majority of their courses approved as accredited programs, and GI Bill students accounting for less than 35% of the total student population) and programs (those with fewer than 10 having all or part of their tuition, fees, or other charges paid to or for them by the school or VA) are exempt from the 85/15 Rule. Therefore, the proposed changes have no bearing on schools falling into those categories. 

VA seeks to fully understand the concerns of non-exempt schools about these proposed changes as we move forward, especially the concerns of smaller schools that might see a greater economic impact. Please take the time to provide your feedback and any data you have on how this change would affect your school, especially if you represent a smaller school.

If you’re not sure whether your school would be considered “small,” the SBA considers education entities to be small by thresholds of annual gross (not net) revenue, broken out by classification, as detailed in the table below:

For background, schools that are not exempt under the Ensuring the Best Schools for Veterans Act of 2022, the 85/15 Rule (38 CFR § 21.4201) prohibits paying VA education benefits to students when more than 85% of the students enrolled in that program are “supported,” meaning any portion of their tuition, fees, or other charges are paid by the school or VA, including Chapter 31 and Chapter 35 benefits. If a school doesn’t enroll enough “nonsupported” students, the cost of the program is presumed to be out of step with the competitive market and thus too expensive for VA to continue to support. The exemptions to the current definition of a supported student—meaning those categories aren’t currently counted towards the 85%—are:

1. Non-Veteran students not in receipt of institutional aid.
2. All graduate students receiving institutional aid.
3. Students in receipt of any Federal aid other than VA benefits
4. Undergraduate and non-college degree students receiving any assistance provided by the educational institution if the institutional policy for granting this aid is the same for Veterans and non-Veterans alike.

VA is proposing to remove these exemptions. However, removal of the first and third categories would have no impact because the students in these categories are already “nonsupported,” as they are not receiving institutional or VA aid. This is existing VA policy. The only impact of eliminating these two exemptions will be to make the Rule easier to understand and reduce the need for schools to seek individualized guidance from VA. The removal of the other two exemptions may mean that some schools will need to recruit students fitting this new definition of “nonsupported” to continue meeting the 15% requirement. Given this possibility, this proposed amendment would also relax the requirements to achieve a waiver from compliance. Further, VA wants to take this opportunity to remind schools that, as before, all requirements of the 85/15 Rule now and in the future will still only affect newly enrolling students, not currently enrolled students. That includes students returning after a break in enrollment unless the break is wholly due to circumstances beyond the student’s control

Why is VA considering this change?  The Post-9/11 GI Bill® pays the full amount of tuition and fees, subject to standardized caps, for a beneficiary's program of education. That prevents student Veterans from having to do cost comparisons which might lead to their picking the least expensive program rather than the best one for their educational needs. As a result, VA must have its own market indicator to make sure that approved programs are charging tuition that is not disproportionate to similarly situated schools. The 85/15 Rule addresses the issue of potentially unjustified cost inflation to protect the taxpayer. However, this tool is currently neither straight-forward nor effective. These proposed changes will increase the Rule’s effectiveness as well as better align with this intent of the law.

You can provide a comment during the Notice and Comment period at https://www.regulations.gov/document/VA-2022-VBA-0022-0001. Comments should indicate that they are submitted in response to RIN 2900-AQ91 – 85/15 Rule Calculations, Waiver Criteria, and Reports. Be aware that any submitted comment will be publicly available. VA will respond to all comments in a final Rule.

Respectfully,

Education Service

If you know a Veteran who is in crisis,

call the Veterans Crisis Line at 988 press 1.