DOD Proposes Tougher Restrictions on Financial Aid for Service Members

restrictions on financial aid credit: USMC/ Lance Cpl. Derrick K. Irions[/caption]

While President Obama spent the better part of last week campaigning for college affordability, the Department of Defense released changes to its military tuition assistance memorandum which, among many things, would end “unfair, deceptive, and abusive recruiting practices” at colleges and universities.

On August 14, the DoD placed in the Federal Register its proposed draft to the memorandum of understanding for voluntary education programs, an agreement between the federal government and higher education institutions that participate in tuition assistance programs for the military.

The proposed changes are designed to align with the Principles of Excellence for Educational Institutions Serving Service Members, Veterans, Spouses, and Other Family Members, an executive order signed by President Obama in April 2012.

Some of the meaningful changes by the DoD would help better inform service members of their educational options, including the financial cost of attendance and loan counseling. In addition, the draft would require higher education institutions to provide academic and student support services, as well as readmission polices for service members, including absences of less than 30 days.

However, some of the other proposals would change the way funds are allocated to service members.

The DoD has proposed stricter grades for service members to receive tuition assistance. Now, students who earn a grade lower than a “C” for undergrad courses or below a “B” for graduate courses would have to reimburse TA funds they used toward the failing course.

Before, earning below a “D” for undergrad and below a “C” for graduate courses would require a service member t0 pay back the funds.

For those who received an Incomplete or “I” in a course, students would be required to return any funds used within six months after course completion or by the deadline for course makeup set by the institution, whichever comes first.

The draft also requires students to maintain a 3.0 GPA after earning six semester hours of graduate coursework in order to keep receiving TA funds. For most colleges and universities, that is generally two courses.

Students who fall below GPA minimums at both the undergrad and graduate levels would lose eligibility for TA funds and would have to tap into alternative sources, whether its other forms of financial aid or personal money.

In addition to reimbursement requirements, the draft memorandum also deleted the phrase “and fees” throughout the memorandum, and restricted TA payments only for tuition. The change cuts out the option for TA payments to cover institutional fees such as laboratory, computer, and instructional fees.

Currently, the funding cap for TA payments is set at $250 per credit hour.

The National Association of College and University Business Officers noted that this change fails to acknowledge differences in how higher education institutions calculate what’s included in tuition and fee categories.

NACUBO found that the change would significantly impact community colleges and some low-cost public institutions, and may be impractical at schools with higher tuition charges.

The draft also added new provisions for higher education institutions that participate in military tuition assistance programs.

The new memorandum would authorize the Assistant Secretary of Defense for Readiness and Force Management to suspend and terminate contracts for three reasons:

  • Failure to comply with participation requirements in the memorandum
  • Indictment of the institution or any senior official of the institution on a criminal charge related to the operation of the institution
  • Termination of an existing DoD MOU or refusal to enter into a new DoD MOU by the Undersecretary of Defense for Personnel and Readiness on national security grounds

Colleges and universities would have the opportunity to respond or appeal to suspensions or terminations to either the undersecretary or the assistant secretary of defense.

The changes would, in effect, place higher standards on academic achievement to receive the benefit, but would push colleges and universities to better assist service members who pursue higher education.

Public comment for the proposed changes ends on September 30 before the draft is finalized.