California backs down from threat to fight VA for GI Bill oversight

California backed down from a fight with the Department of Veterans Affairs over a decision that restricts the state’s power to regulate for-profit colleges enrolling students with GI Bill benefits.

California had used its authority in the past to sanction colleges with shaky finances and to investigate complaints from veterans who felt misled by higher education programs.

The VA in September announced that it would end the agreement that gives California a role in certifying colleges as eligible to receive GI Bill payments, citing the state’s failure to carry out compliance surveys that track whether veterans’ benefits are paid accurately.

The state and the VA have been at odds for several years over the compliance surveys that are central to California’s GI Bill contract.

California through the state Department of Veterans Affairs sought to put more resources into investigations, while the VA reiterated in a series of letters that the state had to catch up on the compliance surveys.

“We want to ensure GI Bill beneficiaries are using their well-earned education benefits in programs that meet the quality standards they deserve,” VA Secretary Robert Wilkie said in an Oct. 1 statement announcing the federal government’s move to cut California out of the process.

California initially rebuffed the VA, insisting the state had the resources and authority to continue monitoring programs where students use GI Bill benefits.

It changed its position with a notice to colleges Sept. 30 in which it said it would relinquish its oversight power to the federal agency until it can negotiate a new agreement with the VA.

“We are considering options and cooperating with the VA to ensure the mutual goal of protecting veterans education benefits and tax payers dollars,” California Department of Veterans Affairs Deputy Secretary Lindsey Sin said.

The GI Bill gives veterans a living allowance and pays for most school expenses for up to 36 months. The benefits can be exhausted, leaving veterans at risk of choosing programs that fail in preparing them for civilian careers. Some can wind up in debt despite the GI Bill’s generous benefits.

Recently, California’s Department of Veterans Affairs has sought to suspend schools for factors that state officials argue violate federal law.

Last year, California temporarily suspended a group of schools with headquarters in other states. California officials questioned whether the schools’ satellite programs in California met criteria for them to receive GI Bill benefits.

Also, California’s state approving agency has refused to declare a for-profit college called Ashford University as eligible to receive GI Bill benefits. The state is suing Ashford, alleging it engaged in unfair business practices that misled students.

California’s recent efforts to suspend schools have not held up in court and the VA has chided the state for pursuing those enforcement actions while falling behind on compliance surveys.

Some advocates are working with the state and the VA both to resume California’s GI Bill contract, fearing the VA is too distant from the state to provide adequate oversight.

U.S. Rep. Mark Takano, D-Riverside, meanwhile, wrote a bill that would give states a mandate to investigate whether colleges and career-training programs deliver on the promises they make when recruiting students.

Lawmakers discussed his bill at an Oct. 16 hearing. It would empower the state agencies that regulate the GI Bill with the VA to sanction schools over misleading statements from recruiters, and require programs to disclose more information to veterans prior to enrollment.

The House of Representatives Veterans Affairs “Committee has been actively working with VA and CalVet to reach an agreement and will continue to improve … contract standards so that (California) and other states can crack down on predatory schools,” Takano said in a written statement. “I am hopeful we will see a contract offered soon so we can ensure California’s student veterans are protected from institutions who abuse the system, target veterans, and leave them with worthless diplomas.”

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Adam Ashton is The Bee’s Capitol Bureau Chief. He leads a team of reporters covering California politics and government. His assignments for The Bee and its sister papers have taken him from Merced to Baghdad since joining McClatchy in 2004.