ITEM 113-108-R1101

MEMO

TO:  Board of Regents

FROM:   Richard A. Crofts,  Commissioner of Higher Education

RE:   Veterans Fee Waiver Amendments 

DATE:   March 21, 2002

Background

Prior to 1992 veterans were eligible for a fee waiver if they were Montana residents who had served in wartime and they had exhausted their federal GI Bill® education benefits. The policy also required the veteran to have "served in a war" but that was interpreted to cover anyone who had served during the lengthy Vietnam era (early 1960's to 1975) in any capacity. In 1992 the Regents amended their policy. Eligibility conditions for Vietnam era veterans were left unchanged. Post-Vietnam era veterans were made eligible for a waiver if the veteran 1) was a Montana resident, 2) had received a medal for service in Lebanon, Grenada, Panama or the Persian Gulf, and 3) was pursuing an initial undergraduate degree 4) had exhausted federal veterans' educational benefits. The basis for the campaign medal approach was that in this era of undeclared wars and police actions this was one way to limit eligibility to veterans who had at least been in a combat theater.

The following table shows the number of veterans fee waivers given out in the last two decades.

The number peaked at 236 in 1991-92 and is currently at a level about one-third of that number. The reasons for the steady decline since 91-92 are not completely clear. Certainly the aging of the Vietnam era veterans to a point beyond traditional school age caused some of the decline. In addition, the tightened 1992 policy requirements (receipt of listed campaign medal and only first undergraduate degree) also played a significant role. If one uses in-state tuition levels expected for the next academic year (approx. $3000) the current cost in foregone revenue of 85 veterans fee waivers is $255,000 annually. If the number were to return to the level of a decade ago the annual cost would be $708,000. Under the current system of state appropriations the University System would get no additional funding if the number of veterans fee waivers were to increase as a result of a liberalization of the fee waiver policy.

The Cost of Proposed Amendments to the Fee Waiver Policy

In November the item before the Board would have expanded eligibility for veterans fee waivers by amending the campaign medals which would qualify a veteran for a waiver. At the request of some Regents a draft was brought before the Regents in January that dropped the campaign medal approach and made all veterans eligible once they had exhausted federal benefits. Some concern was voiced at the meeting that such a change might result in a significant increase in costs to the University System.

Between the January and March meeting OCHE staff have attempted to pin down statistics on veterans college attendance that might give us some way to calculate what the cost might be of extending the fee waiver to all veterans who have exhausted federal benefits. Our own statistics on veteran college attendance are based on voluntary self reporting. Veterans who are not currently eligible for benefits have no need or incentive to indicate their status. Similarly, neither the federal Veterans Administration nor the state Department of Military Affairs can offer reliable statistics about veterans attending college who have exhausted federal benefits. And of course, no one can tell how many veterans, now out of school, might return to school if they knew a fee waiver was available.

Clearly, expanding eligibility to all veterans who have exhausted federal benefits will result in some increased cost. However, it is hard to imagine that the number of waivers granted under such a policy would exceed the number given under the pre-1992 policy when waivers for both undergraduate and graduate study were available to all Vietnam era veterans who had exhausted federal benefits. Therefore, it is probably safe to say that no reasonable estimate of increased costs of such a policy liberalization should exceed $450,000 annually ($3000 x 150 fee waivers).

Who Should be Responsible For Increased Costs

Rewarding individuals for military service is a governmental policy of long standing at both the federal and state level. And in the aftermath of September 11 we have a heightened awareness of the role military service plays in protecting our most cherished freedoms. But the values preserved and protected by men and women in uniform are not unique to the Montana University System. Rather, the values are diffused through and enjoyed by society at large. In 1992 the Regents restricted eligibility for veterans fee waivers in an attempt to limit the cost of that benefit. If veterans fee waiver eligibility is going to be expanded some entity is going to have to bear the cost of that expansion. It is not unreasonable to expect that this increased cost should be borne, not by the University System, but the state in general. If the University System is made to absorb the cost, it merely means that other non-veteran students are paying a price to subsidize their fellow students who are veterans.

The Item Now Before the Regents

Last month Regent Semmens proposed several legislative initiatives to the Board. One element of the "access" initiative was a request to the legislature to "increase tuition and fee waivers for honor students and veterans."  Consistent with that initiative the Item on veterans fee waivers has been recrafted. As now written the Item would modestly expand eligibility for fee waivers by granting the waiver to all recipients of the Armed Forces Expeditionary Medal, rather than restricting it to certain campaigns. In addition recipients of the recently created Kosovo Campaign Medal would also be made eligible. However, eligibility to all veterans, regardless of where and how they served, would be made contingent upon receiving legislative funding for the waiver. If adopted by the Regents in this form I would contemplate that a request for funding would be made part of the Regents' legislative package, possibly paired with the request for funding an expanded high school honor scholarship program.