House Committee Votes Cap on Flight Training Benefits

 - May 21, 2015, 12:47 PM

On May 21 the U.S. House Veterans Affairs Committee voted to cap public college tuition and flight-training benefits under the post-9/11 G.I. Bill to $20,235 per year for qualified U.S. military veterans, with an amendment to grandfather all veterans currently enrolled in flight-training programs for two years. The $20,235 cap already applies to private and nonprofit schools. The imposition of that cap in 2011 forced private schools with aviation programs to partner with public institutions and/or their agents to provide the flight-training portion of their curricula. The new amendment is designed to close a loophole in the current law that permitted virtually unlimited Veterans Administration (VA) funding of courses taken at public colleges or their affiliates, including flight-training fees.

Aviation alphabet groups vociferously opposed the tuition and fee cap as “an overreaction that imperils not just veterans in helicopter flight-training degree programs, but all flight training degrees.” The proposal is part of a larger bill (H.R. 475) dealing with reform of the VA that will now go to the full House for consideration. Committee member Rep. Brad Wenstrup (R-Ohio), said the amendment is necessary “to curb skyrocketing prices” in light of past abuses that included the VA paying more than $534,000 for flight-training fees and tuition for one student for one year; he added that prices at flight schools receiving VA funding jumped by an average of 87 percent between 2013 and 2014.

There are 22.2 million U.S. veterans, 6.2 million of them from the Gulf War era. Those veterans have a median age of 40. The Veterans Administration is one of the fastest-growing elements of the federal budget. The Fiscal Year 2016 budget request for the VA is $168.8 billion. The VA’s 2014 budget was $152.7 billion, of which $86.1 billion went toward mandatory benefits, including disability benefit compensation and education benefits such as the Montgomery GI Bill; the Post-9/11 GI Bill; and a new education program, the Veterans Retraining Assistance Program (VRAP), which provides financial support to individuals between 35 and 60 years old. Last year the VA processed 4.3 million education benefit claims, up 6.5-percent from 2013, when the VA spent $10.267 billion on these benefits. Altogether, an estimated 1 million veterans received education benefits in 2014 worth more than $12 billion at some 12,149 schools. While flight-training benefits are a minuscule part of this total, their year-over-year rise greatly exceeded the educational benefit rate of increase as a whole.

According to data provided to AIN by the VA, the agency spent $42 million on tuition and fees in FY 2013 on behalf of 1,713 veterans enrolled in flight training programs at public institutions of higher learning (IHLs); it spent $80 million on behalf of 1,884 veterans in those same programs in FY2014. In FY2014, there were 111 VA-approved public IHLs with flight programs. While all public and nonprofit accredited IHLs are eligible for use of benefits, the states approve for-profit and other programs for use of the federal GI Bill benefit on behalf of the VA.

According to the FAA, there were 120,285 student pilots in the U.S. at the end of 2013. Those subsidized by the VA represented less than 2 percent of the total. Nevertheless, in a statement distributed on June 9, Helicopter Association International (HAI) president Matt Zuccaro insisted, “Veterans using these programs represent one of the best prospects for rebuilding a declining pilot population.” AIN reached out to an HAI spokesman for comment on June 5 via telephone. That call was not returned. We then reached out to Zuccaro directly via e-mail on June 9, which was not acknowledged.

Given the VA and FAA data, the argument that capping VA flight benefits would somehow significantly impede the aviation industry’s ability to address a looming pilot shortage could be seen as dubious.

However, Zuccaro and others who oppose the tuition caps make another argument that will perhaps have more emotional resonance: one of basic fairness. “The GI Bill was there for me after my service in Vietnam. Now HAI is committed to making sure it’s there to meet the needs of today’s veterans,” Zuccaro wrote in the June 9 public statement.

Embry-Riddle Aeronautical University (Prescott) chancellor Dr. Frank Ayers made the same point in an interview with AIN on June 8. “We have students whose main motivation to join the military was to obtain the [VA] benefits to become pilots. They went to Iraq or Afghanistan. They came back and now they’re doing flight training and the rules are about to change. Would they have made a different decision [to enlist] five years ago if they knew the benefits wouldn’t be there when they got out?”

Affiliate Training

ERAU provides in-aircraft training to veterans through its association with Dodge City Community College and Universal Helicopters. Ayers estimates that of approximately 2,035 students at ERAU Prescott, 50 to 60 are veterans “guest flying” with Dodge City and Universal, as a work-around to the ban on VA benefits being used to finance flight training at private schools. Last year ERAU Daytona received $16.65 million in education reimbursement from the VA while Prescott netted $4.326 million, according to the VA. All of those funds were used for tuition reimbursement for non-flight training curricula under the $20,235 private school cap, which does not completely cover the cost of annual tuition of approximately $30,000, according to Ayers, who said that ERAU offers veterans–approximately 10 percent of ERAU’s overall population–scholarships and a discount to make up the difference. “This university was founded by Army pilots, so it’s in our DNA,” said Ayers.

Not all veterans attending ERAU enroll in flight-training programs. Overall, approximately 20 percent of ERAU students are in flight-training programs, with 90 percent of those in fixed-wing training and the remainder in helicopters. This closely mirrors national apportionments for fixed- versus rotary-wing flight training. Flight training costs at ERAU are billed hourly and not included in the cost of basic tuition. Undergraduate students in the fixed-wing flight training sequence can obtain ratings up to a restricted airline transport pilot (ATP) rating upon graduation. (Pilots must be 23 years of age and have at least 1,500 hours total time to qualify for a regular ATP.) The additional flight training costs average $60,000 to $80,000 over the course of a four-year degree enrollment, Ayers said. In-aircraft rotary-wing flight training averages approximately twice the cost of fixed-wing training.

According to a VA spokesman, “Flight programs, like other programs at IHLs, are not subject to an annual tuition and fee cap, as long as those classes count toward graduation. The issue that has been the topic of some congressional debate is that this permits two- and four-year degree granting institutions to contract with a flight training company, and with no statutory limit to the amount of tuition and fees that can be charged per student.”

Program Abuses

According to Veterans Affairs Committee chairman Rep. Jeff Miller (R-Fla.), the VA began noting what it considered abuses with regard to flight programs last year and approached the committee seeking legislative redress. In prepared testimony submitted to the committee, the VA noted that it is “concerned about high tuition and fee payments for enrollment in degree programs involving flight training at public IHLs. Education benefit payments for these types of programs have increased tremendously with the implementation of Public Law 111-377 (a k a the Post 9/11 GI Bill, enacted in 2011), and in some cases, public institutions seem to be targeting veterans with their flight-related training programs. There has been a significant increase in flight training centers, specifically those that offer helicopter training, that have contracted with public IHLs to offer flight-related degrees. Sometimes these programs charge higher prices than those that would be charged if the student had chosen to attend the vocational flight school for the same training. Additionally, the VA has noticed that a growing number of VA beneficiaries are taking flight courses as electives. In most cases, these courses are not specifically required for the veteran’s degree.”

Ayers, Zuccaro and other critics of the new proposed cap argue that flight training benefit program abuses were the result of lax enforcement of existing rules and mismanagement by the VA. “Lax enforcement of existing VA regulations coupled with liberal policies allowed some flight schools to charge the VA far more than was the intent of the Post 9/11 GI Bill. The bill is intended to train a veteran in any course of study to a point that he or she can enter the civilian workforce. In the aviation industry, that generally means a commercial pilot with flight instructor and flight instructor-instrument certificates,” Zuccaro wrote in HAI’s June 9 public statement. “Congress must not single out our industry based on a few isolated incidents caused by inept VA management of college flight-training programs.”

Ayers points out that some of the huge overcharges cited by the Veterans Affairs Committee and widely reported in the media in the months leading up to the May hearings were the result of unscrupulous schools providing primary training in turbine-powered aircraft, as opposed to the piston-powered aircraft that are more cost-effective and appropriate vehicles for private pilot and single-engine instrument ratings. In some cases those schools were also violating the VA’s “85-15” rule, which provides that non-veterans account for at least 15 percent of the student body in schools receiving VA benefits. The 85-15 rule exists to prevent schools from forming strictly to enroll veterans. The VA has disqualified at least one flight school for violating the 85-15 rule.

However, in the minds of Ayers and others in the industry, the proposed cure of a tuition cap is worse than the disease. “This would appear to stop veterans from doing flight training almost anyplace. Maybe at a state school with low tuition they could do eight to ten thousand dollars’ worth of flight training unless they string it out. But that would raise costs even more. If you fly only once a week you just pay for the same lesson over and over again,” he said. “It’s sad. These veterans are highly motivated to become the best helicopter and fixed-wing pilots.” 

In his public statement, Zuccaro asserted that the proposed cap on flight training is discriminatory. “No other public collegiate degree program faces such a cap. Moreover, the $20,000 annual cap is inadequate, and student loans to make up the difference are nonexistent.”

Legislative Resistance

That argument seems to have gained some traction on the Veterans Affairs Committee. Not all committee members agreed that imposing the $20,235 cap was appropriate and modified legislative language is likely.

Committee member Rep. Dina Titus (D-Nev.) noted that the cap would adversely affect veterans pursuing helicopter training. “This language drastically limits the ability of veterans to attend pilot training schools. I’m concerned that [with] this cap in place, most veterans who are interested in using their GI Bill for helicopter training won’t be able to do it.” Titus also pointed out that loans for student flight training don’t qualify for government-backed guarantees, are considered unsecured, are difficult to obtain and carry annual interest rates of more than 12 percent, or three times that of a government-backed student loan. “It’s almost impossible for a student to get these loans,” she added.

Ranking member Rep. Corrine Brown (D-Fla.) expressed dissatisfaction with the cap and hinted that she would push for changes before it reached the House floor. “There is still work to be done before this bill reaches the House floor. It is clear there are still some issues that need to be addressed.”

The measure is also in for scrutiny in the Senate. U.S. Sen. John McCain (R-Ariz.) has met with flight school leaders in his state and indicated his opposition to the proposed cap when/if the legislation finds its way over to the upper chamber.

Ayers said that simply enforcing existing rules would solve the problem. “The real issue (for flight schools enrolling veterans) is: Do you follow the rules or don’t you follow the rules? If you don’t follow the rules, you get these one-year, $500,000 flight training bills.”