GI Bill Flight School Benefits Could Be Slashed By Congress Amid Tuition Loophole Controversy

The GI Bill has long been seen as one of America's ways to thank its military veterans for their service by rewarding them with tuition-free educational opportunities, but that may all change if a controversial proposal is approved by Congress to close a purported loophole associated with the federal benefit. As the Pentagon prepares to reveal its defense budget Tuesday, there is real worry that if the legislation passes, funds that help pay for veterans' flight lessons will be slashed, exacerbating a shortage of pilots in the U.S. commercial aviation industry.

Introduced by Rep. Brad Wenstrup, R-Ohio, and supported by a majority of the House Committee on Veterans' Affairs, the proposed reforms to the GI Bill were spurred by claims that some flight schools are taking advantage of the unlimited funds they can charge the government to pay for veterans’ flight degrees. Some members of Congress claim that schools are billing upwards of $500,000, while defenders of the GI Bill say for-profit schools have undermined many of the flight programs by price-gouging the public colleges and universities that run them, insisting the Department of Veterans Affairs' poor fiscal management is to blame.

“Amvets strongly believes that since veterans ‘earn’ their GI Bill benefits, no one — neither Congress nor the VA — should be able to control, under the current system, how those benefits are utilized,” said Diane Zumatto, national legislator for Amvets, one of the country’s biggest veterans' service organizations. “If this bill gets signed into law, it will be the start of a very ‘slippery slope,'” added Zumatto, whose group believes the bill could lead to a precedent of cutting other expensive education programs like law or medicine.

While the Post-9/11 GI Bill pays for veterans who have served three years active duty to attend up to 36 months of public college for free, flight training is essentially blocked under the GI Bill’s original parameters that prohibit paying for schooling that doesn’t offer two- or four-year educational degrees. While aviation degrees have been around for more than 40 years, the changes to GI Bill in the wake of 9/11 allowed tuition costs to soar, subsequently highlighting the issue to Congress.

Normally there is a tuition cap of $21,084 to what the GI Bill will pay public colleges, unless there is specialized training involved needed to contribute to the degree. In those cases, the cap is lifted. Some private schools, which typically have a much lower cap, can also apply for a scheme that shares the cost of the additional tuition between the school and the VA, known as the Yellow Ribbon program. Those in Congress who want to end what they describe as a loophole being taken advantage of have alleged this is how flight schools have been able to connect with both for-profit and traditional colleges and charge what they want for the aviation training.

“The GI Bill flight school loophole is so big you could fly a 747 through it,” Rep. Jeff Miller, R-Fla., chairman of the House Veterans’ Affairs Committee, who backed a report on the alleged abuses by flight schools, told International Business Times. “For years, some schools have exploited this loophole, gouging taxpayers with exorbitant tuition expenses of up to more than $500,000 for a single student.”

To close the loophole for good, Wenstrup introduced the GI Bill Education Quality Enhancement Act of 2015 last May, which proposed the tuition cap on flight schools. Seven months later, that act was added to a much broader bill known as VA Provider Equity Act, which was scheduled to be voted on in the House of Representatives Tuesday, the first hurdle of many before it can become law. A congressional report released alongside the VA Provider Equity Act in December noted it didn't take the tuition cap lightly but had become “concerned that the sharp growth in these programs and the uncontrollable increase in the cost of flight training." Wenstrup did not return multiple requests for comment.

According to Miller, the findings of the report were initially backed by some veterans' groups, including the Department of Veterans Affairs, Veterans of Foreign Wars, the American Legion, Iraq and Afghanistan Veterans of America (IAVA), Paralyzed Veterans of America and the National Association of State Approving Agencies at a March 2015 House Veterans' Affairs Committee legislative hearing.

However, the loophole and its origin are being contested by a number of the flight schools that would in effect lose funding if the proposed bill were enacted. Alex Nicholson, who first endorsed the bill as the legislative director for IAVA, now finds himself contesting it as a representative of Southern Utah University in Cedar City. Rather than blaming flight schools, Nicholson suggested the VA should question its own role in the matter.

“After we lifted up the hood and peeled back the onion we discovered that the VA was the source of this loophole problem, and they had mismanaged and overruled the cost control mechanisms that Congress put in place to prevent these exact types of scenarios,” said Nicholson, who said the veteran groups that originally supported the bill did so with old information. “It’s not the fault of the school or the student. The VA had oversight responsibility and decided to override cost control policies that pried that hole open wide."

Referring to a student who racked up a flight school tuition bill of more than $350,000 at Southern Utah University, which is paired with the Upper Limit Aviation flight school, Nicholson said VA officials were the ones forcing the university to allow the student to continuously retake flight exams, which is why the bill was so high. Other flight schools in Florida, Texas, Arizona and Washington have also presented individual bills to the VA in excess of $400,000, congressional reports claim.

However, Nicholson also said that part of the issue that Congress has so far failed to understand is that students are being trained on higher-end aircraft and given the right amount of flight hours in order to ensure that they are fully employable when they graduate. Some schools, he claims, are using older aircraft, which are cheaper but do not lead to employability upon graduation.

While the opportunity to pair with a university allows flight schools to make extra revenue through veterans, not all the schools are happy about the alleged abuses that have taken place.

“These people are ripping veterans off, and that’s going to be bad for us,” said Richard Greene, who is a certified FAA inspector and owner of Century Air flight school in Fairfield, New Jersey, which offers two-year associates' degrees in collaboration with Morris County College in the nearby town of Randolph. “You get these people charging huge amounts for the helicopter training, ripping off the VA. What did they think was gonna happen? They are ruining the industry."

This isn't the first time private educational institutions have been accused of taking advantage of veterans and the GI Bill.

“One of the problems is, is that for-profit schools, places like University of Phoenix, which is famous for people not graduating, are exploiting veterans and more or less stealing money from the VA,” said Matt Howard, co-director of Iraq Veterans Against the War, a New York-based advocacy group. “So many of these for-profit schools don’t really have an interest in the education of veterans; they're just looking to make money off the GI Bill and make money off those veterans, who have very little to show for it at the end."

Specifically pointing out the University of Phoenix, Howard said he’d heard reports of the school being allowed on military bases under the guise it would show servicemen and servicewomen how to apply to college. Instead, Howard said, all they did was attempt to recruit soon-to-be-veterans.

The University of Phoenix has often been highlighted as a constant abuser of the GI Bill, taking in more GI Bill dollars than any other university or college in the country but spending less than $900 per student, a lower cost than almost any other college in the country, according to various congressional documents. At least one Senate report indicated the school set aside more than $1 billion for profit and nearly another $1 billion to its call centers and other marketing and recruiting departments.

While the University of Phoenix doesn’t offer flight degrees, its conduct with regard to veterans and accepting money from the government for degrees that Howard claims to be useless are precisely the reason Congress is taking aim at the newest concern with flight schools.

That said, Howard doesn’t think these experiences should mean veterans must have restrictions on their educational options. “Certainly, in the case of flight schools, these veterans have done their time and have aimed at a profession that is expensive to get into. I don’t think that warrants Congress denying that career path for vets."

The proposed legislation is already causing noises in the aviation industry, which has maintained that making it harder for veterans to attend flight school will cause damage to the aviation industry and its reported shortage of pilots.

The new ruling “will exacerbate the deteriorating pool of commercial pilots — thereby accelerating the pilot shortage in this country — and will have a lasting detrimental effect on the commercial aviation industry in the United States,” a May letter to Congress from seven of the biggest aviation groups in the U.S. stated. Flight companies contend that the helicopter industry, for example, is dominated by older pilots who learned to fly during the Vietnam War. Their retirements will likely result in a national shortage. However, FAA data show that most pilots are between 25 and 35 instead of 55 to 65, according to an L.A. Times report from earlier this year.

Regardless of the data, there is still an apparent pilot shortage in the U.S. Boeing, the plane manufacturer, projected a need for 558,000 new pilots worldwide during the next 20 years, including 95,000 in North America. In April, May and June of 2015, a pilot shortage forced American, Delta and United to cut 4 percent of their flights, according to a USA Today report from August 2015.

A report on the pilot shortage by the Government Accountability Office in 2014 offered varying conclusions, saying its extent depends on wages, demand for flights and the cost of a pilot's education. It also noted the military isn't the source of commercial pilots it once was, reporting that “prior to 2001, some 70 percent of airline pilots hired came from the military, whereas currently they estimated roughly 30 percent come from the military."

Given the shortfall of pilots in the U.S., aviation groups are asking Congress not to take away the rights of veterans to pursue a profession in aviation. The group calls on the VA to fix the “mismanagement, infighting and alleged corruption” before targeting the people it was supposed to help, the May letter noted.

“We want to give veterans the opportunity to become professional aviators,” said Mark Baker, president of Frederick, Maryland-based Aircraft Owners and Pilots Association, the world’s largest general aviation association. “We support efforts to prevent waste and fraud, but this legislation has the potential to do more harm than good. There are better ways to ensure that VA education dollars are well-spent and that our veterans get the educational opportunities they have earned through their service to our country.”