Updated July 6, 2021
Original Post December 4, 2020
The changes to the VA's 85/15 rule were delayed again and are now expected to go into effect on October 1, 2021. That means we're opening our bootcamps back up to GI BillⓇ applicants. We are still pursuing a waiver to the new 85/15 rule with the VA, but this delay gives us more time to pursue a waiver and explore other ways to help veterans in Middle Tennessee.
We have just determined that we must severely limit the admission of veterans seeking to use their GI BillⓇ entitlement to pay tuition for bootcamp programs at NSS. The restrictions could go into effect starting with our October 2021 bootcamps (updated from original post). This is an extremely painful decision for us to take but recent, unexpected changes to VA regulations leave us no choice (see below for more details).
We’re not sure how long this restriction will need to stay in effect. We are applying for the only possible waiver that the VA regulations seem to allow. So far, the VA has been unable to give us any insight into the timeline for a decision on our request for a waiver or any visibility as to the decision criteria or decision process. All we can say is that we will provide updates on the process as we receive information back from the VA. Rest assured that we will lift our restriction on GI BillⓇ admissions at the earliest possible date we can without putting NSS at risk of violating VA regulations.
Note that this does not mean that we are eliminating the admission of veterans to NSS. Our other tuition options, including the Opportunity Tuition, are still available to veterans. However, we realize that this may not meet the needs of all veterans since the GI BillⓇ not only pays for tuition but provides a monthly housing allowance that many veterans need in order to support themselves during class. At this point in time, we can offer scholarships and tuition deferment via our other payment options but we are unable to provide cost-of-living support as does the GI BillⓇ. We are looking into options that may allow us to offer a level of cost-of-living assistance but it will take some time before we can determine the feasibility and timeline for such a program.
Why were we forced to make this decision?
A few weeks ago, buried in a bill passed by Congress, changes were made to the VA’s 85/15 rule. The 85/15 rule was originally put into place to restrict abuses of the GI Bill by predatory vocational schools. Such schools take advantage of veterans and the VA by enrolling veterans into vocational programs that served mainly as a way to transfer money from the government to school operators rather than as a legitimate way to prepare veterans with skills for a civilian career. There is a history of unscrupulous operators setting up schools with the intent of defrauding the VA and we have no argument against the need for regulations in this area. However, this is a great case study of how a regulation designed to eliminate one abuse can have unintended consequences that end up hurting the very individuals it was designed to protect.
The 85/15 rule’s intent is to ensure that schools have at least a minimum number of non-GI BillⓇ students who are legitimately paying out of their own pocket the tuition of a vocational program. Up to 85% of the students in a program may be veterans using GI BillⓇ or other students receiving “financial support” from the school, but 15% must not be receiving financial support. That means, given our typical class size, that we must ensure that we have at least 4 students who do not receive financial support. Sounds pretty easy to comply with, right? Not so fast - that all hinges on what constitutes “financial support” from the VA’s point of view.
In fact, the rule has always restricted our ability to enroll veterans. Our Opportunity Tuition students are judged by the VA as receiving financial support. Almost half of our students are on Opportunity Tuition, plus another 5% to 10% receive partial scholarships (also classed by the VA as a form of financial support), so before we enroll a single GI BillⓇ student we have over 50% of students receiving financial support, i.e. 12 or 13 of the students out of a 25 student cohort. Without getting too deeply into the weeds of the nuances and exceptions and timing issues baked into the regulations, and into the interpretation of the regulations in the field by the VA staff, we realized a long time ago based on the regulations as they existed up until the last few weeks that we had a practical limit of four or five GI BillⓇ students in any given class (i.e. 20% or so of a typical class).
The recent rule change significantly (at least from an NSS perspective) alters which students are classified by the VA as receiving financial support. Under the new rules, any student that has not paid 100% of their tuition within the first month of class is now viewed as receiving financial support. Students who are on a payment plan with NSS are considered as receiving financial support, even if they will pay their full tuition before graduation. Also, students who borrow any portion of their tuition from one of our student loan partners are considered as receiving financial support from the school since as an aspect of our partnership with the loan providers NSS agrees to share some of the financial risk with the loan partner should a student not fully repay a loan. Students who are obligated to pay their full tuition to a student loan provider now are considered to be receiving financial support from NSS (note that these regulations only apply to non-accredited vocational schools - accredited colleges and universities can have every single student getting some form of student loans or other financial support).
Given the new rules, we are at risk if a class has even a single GI BillⓇ student if enough of the other students are on payment plans, take out student loans, and/or receive scholarships from the school. In fact, we have an example of that exact situation where out of 23 students there was a single GI BillⓇ student and yet because of the financing decisions made independently by all of the other students in the class NSS would have been adjudged as not complying with the newly revised 85/15 rule.
Backers of the new regulations pointed to giving the VA tougher rules that could be used against predatory for-profit schools. But they aimed at one target and managed to hit another. Somehow regulations intended to catch predatory for-profit schools that defraud the VA and don’t give veterans the skills to start real civilian careers, end up hurting a non-profit school, with 90+% success rates in terms of graduate placement into high-paying tech careers, and that has an entire business model designed to help adults from economically disadvantaged and financially fragile circumstances get access to good careers.
Ultimately, the regulations really don't hurt NSS - we can replace the 3 or 4 or 5 veterans we would have enrolled in each class with other applicants. The reason this is all so unfortunate and infuriating is that it means that there are veterans that won’t get the chance to acquire high value skills in an accelerated manner and quickly get into a great civilian career. The new regulations end up hurting veterans by reducing the number of high-impact training options available to them in our region.
Our founding mission included providing veterans with a pathway to a high value civilian career. A few years later we were proud to be one of the first bootcamps approved to accept the GI BillⓇ. We remain committed to helping veterans start a new tech career. We will continue to serve veterans using our other financial support options while we diligently pursue a waiver that will make it possible for us to once again accept GI BillⓇ applicants as well as explore other ways to help veterans in Middle Tennessee attend NSS.
