Background Airlines commonly overbook their flights to avoid revenue losses associated with passenger no-shows as part of their revenue management strategies. Successfully overbooking requires that airlines accurately predict the number of passengers who will not show up for a given flight. In deciding how much to overbook flights, airlines use historical data to identify factors that make passengers more or less likely to show up for their flights; these factors can be passenger or flight specific. For example, according to representatives from an airline industry association, leisure passengers are less likely than business passengers to change their flights at the last minute, because their tickets typically have more restrictions and higher change fees. As a result, according to these representatives, airlines generally oversell fewer seats on flights heavily traveled by leisure passengers, such as flights during the holiday season or flights to common vacation destinations (e.g., Disney World). Similarly, these same representatives said that airlines are less likely to overbook the last flight of the day on a given route because passengers are more likely to show up for these flights. A number of other factors, in addition to overbookings, can lead to airlines denying boarding to passengers. These factors can be driven by safety concerns, operational necessity, or personnel needs. For example, a passenger may be denied boarding for safety or security reasons if they are too intoxicated to fly or if they are unruly (e.g., they get into a fight). Passengers may also be denied boarding to accommodate flight crews that need to get to a different location or U.S. air marshals, who tend to book flights near planned departure times. DOT does not regulate airlines’ overbooking practices, aside from requiring airlines to inform passengers that a flight may be overbooked. Instead, DOT’s regulations primarily focus on oversales, which can be the result of an overbooking and occur when some passengers with confirmed space on a flight cannot be accommodated (i.e., “denied boardings”). Passengers are voluntarily denied boarding if they willingly accept the airline’s offer of compensation, in any amount, in exchange for relinquishing their confirmed seat. Any other passenger denied boarding is considered to have been denied boarding involuntarily. Because of these regulations, airlines generally have a standard process for denying boarding to passengers, both voluntarily and involuntarily, and communicating denied boarding information to passengers. When a flight is oversold, airlines are required to solicit passengers to voluntarily give up their seats, before denying boarding to passengers involuntarily. To encourage passengers to volunteer to relinquish their seat, airlines may offer incentives, such as money or vouchers for future flights. There is no minimum or maximum amount of money or vouchers that the airline is required to offer, and passengers can negotiate compensation amounts. Federal regulation requires that airlines inform each passenger solicited to volunteer for denied boarding whether they are in danger of being involuntarily denied boarding and, if so, the compensation the airline is obligated to pay. In cases where a flight is oversold and airlines do not get enough volunteers who are willing to relinquish their seat, they will select passengers to give up their seats involuntarily—sometimes referred to as being “bumped.” Airlines are required by regulation to establish boarding priority rules detailing the factors they consider when selecting passengers to be denied boarding involuntarily. These factors may include when the passenger checks in, the fare paid, and the passenger’s frequent flyer status. However, according to DOT’s website, the criteria cannot subject a passenger to any unjust or unreasonable prejudice or disadvantage. For example, an airline cannot use a passenger’s race when making decisions about denied boardings. Further, some airlines make exceptions to their boarding priority rules for passengers with disabilities, including generally not denying them boarding. Airlines are required to compensate certain passengers who are denied boarding involuntarily. Minimum compensation amounts are set in regulation and, as shown in table 1 below, vary based on the price of the ticket, the length of time the passenger is delayed reaching their destination, and whether the flight’s arrival airport is domestic or international. Airlines generally must provide compensation by cash or check when the passenger is denied boarding involuntarily, in addition to a written statement explaining the terms, conditions, and limitations of the compensation, and describing the airlines’ boarding priority rules and criteria. Denied Boardings Have Declined in Recent Years, but Some Passengers Denied Boarding Reported Significant Inconveniences The total number of passengers denied boarding—voluntarily or involuntarily— generally decreased from 2012 to 2018. Moreover, denied boardings represented a small percentage of the total number of passengers who boarded flights. On an annual basis, denied boardings accounted for between about 44 (in 2018) and about 100 (in 2012) passengers per 100,000 actual boardings—a rate of less than 0.1 percent of actual boardings. As illustrated in figure 1, of these passengers denied boarding, most are voluntary. For example, in 2018, for every 100,000 actual boardings, about 43 passengers were voluntarily denied boarding and about one passenger was involuntarily denied boarding. Passenger complaints submitted directly to DOT about denied boardings also generally decreased from 2012 to 2018, relative to total complaints and passenger boardings. As shown in figure 2, the number of passenger complaints to DOT about denied boardings represented a small percentage of total passenger complaints from 2012 to 2018, annually accounting for less than 4 percent of all complaints. On an annual basis, from 2012 through 2018, the number of complaints about denied boardings reported to DOT ranged from about 410 (in 2018) to about 650 (in 2015). We have previously reported, however, that DOT’s complaint data provide an incomplete picture of all passenger complaints because passengers may not be aware that they can report complaints to DOT, and DOT’s complaint data do not include complaints from passengers submitted directly to airlines. Specifically, in 2018, we reported that across all complaint categories, DOT estimated it received one complaint for every 50 complaints the airline receives. In an effort to avoid denied boardings, airlines can, in some cases, accommodate passengers in a different section of the aircraft, either by upgrading or downgrading passengers. A revenue management specialist and representatives from an airline industry association we interviewed said that, with limited exceptions, airlines generally do not overbook their premium cabins. Our review of DOT data found that in recent years, until 2018, airlines have generally upgraded fewer passengers to avoid denied boardings. According to representatives from an airline industry association, the decrease in the number of passengers upgraded is likely because airlines have fewer empty premium seats in their first-class cabins than in past years because they are selling more of these seats. For example, a stakeholder said that airlines are now selling upgrades on the day of departure and allowing more customers to use miles to upgrade their seat, leaving fewer available empty premium seats when flights are oversold. DOT permits airlines to downgrade passengers, as long as the airline refunds the passenger the difference in fares. In practice, representatives from an airline industry association said that when a passenger in a premium cabin is to be denied boarding, airlines generally offer the passenger the option of a premium cabin seat on another flight or to downgrade to the economy cabin along with compensation for the fare differential. In our review of seven airline’s contracts of carriage, five explicitly stated that if passengers are downgraded, they will be entitled to an appropriate refund, and the other two airlines do not include information about downgrades in their documents because they do not have different cabins of service. According to representatives from an airline industry association, the refund amount is calculated based on the average difference of fare paid between the two cabins, and it is dependent on the flight’s origin and destination. Passenger Compensation for Involuntary Denied Boarding While the average amount of compensation for passengers involuntarily denied boarding has increased in recent years, a smaller percentage of such passengers received compensation. As previously mentioned, in certain situations, passengers who are denied boarding involuntarily may not be eligible for compensation. For example, airlines are not required to compensate passengers if an airline uses a smaller aircraft than originally planned for operational or safety reasons and thus cannot accommodate all confirmed passengers. Our review found that the percentage of passengers that were involuntarily denied boarding who qualified for compensation decreased from 76 percent in 2012 to 64 percent in 2018. Aircraft substitution may be contributing to fewer passengers being eligible for compensation, according to DOT data. For example, one airline that does not overbook experienced a number of operational issues in 2016 and 2017 that forced it to operate many of its flights with smaller aircraft. As a result, the airline had to deny passengers boarding involuntarily, and these passengers were not eligible for compensation. As figure 3 shows, from 2015 to 2018, most of the passengers who were denied boarding involuntarily and were not eligible for compensation were ineligible due to airlines using smaller aircraft on some flights. Effects of Involuntary Denied Boardings on Passengers Although the total number of involuntary denied boardings decreased from 2012 to 2018, any passenger involuntarily denied boarding could face varying levels of disruptions to their travel plans. Passengers who are rebooked on the next scheduled flight may encounter minimal inconveniences or expenses. However, other passengers may face more significant travel disruptions, according to representatives from consumer advocate organizations we interviewed. Our review of a non- generalizable sample of passenger complaints submitted to DOT in May and June 2019 also identified instances where passengers reported incurring significant costs in terms of time and money as a result of being denied boarding involuntarily. For example, one passenger reported missing a wedding and paid about $450 in additional hotel costs. In another instance, a passenger missed their cruise after being denied boarding involuntarily. Consumer advocates also told us that passengers may incur costs such as lodging, meals, and transportation, or might miss work as a result of being denied boarding involuntarily. Airlines’ ability to rebook passengers who are involuntarily denied boarding on the next available flight can be limited. Over the past several years, airlines have increasingly flown with fewer empty seats— particularly on certain routes—than was typical in the past, according to DOT data. With fewer open seats, airlines have limited options to rebook passengers who are denied boarding. For example, across all departing flights at Hartsfield-Jackson Atlanta International Airport in 2018, on average, 86 percent of seats were filled. These data represent averages across all flights and stakeholders said that factors such as time of day, day of the week, season, and flight origin or destination can affect the number of empty seats on a particular flight. For example, flights on Sunday evening tend to be fuller than flights on Tuesday. One airline revenue management specialist estimated that about 25 to 30 percent of all flights have no empty seats. Representatives from consumer advocate organizations that we interviewed said that planes are operating at record-high levels of capacity, and one advocate stated that no transportation system is designed to operate at or near capacity all of the time, which they believe some airlines are doing on certain routes. In addition, we have previously reported that service to smaller communities is generally less frequent, providing airlines with fewer opportunities to rebook passengers than for more traveled routes. Airlines may also not be able to rebook passengers who are denied boarding on a different airline that has seat availability if they lack commercial agreements to do so. Further, according to representatives from an industry association representing airlines, while most airlines have agreements in place that allow passengers to be rebooked on a different airline, these agreements are primarily used to accommodate passengers on delayed and canceled flights. According to these representatives, passengers who are denied boarding are almost always re-accommodated on the same airline, given that the customer typically volunteers to take a later flight on the same day. Our review of seven airlines’ contracts of carriage found that four of them have documented policies in place to rebook passengers who are denied boarding on a different airline. Our review of DOT data found that fewer passengers are being rebooked on flights that arrive within an hour of their original flight. Specifically, in 2012, 11.5 percent of rebooked passengers were accommodated on such a flight, compared to 0.11 percent in 2018. While DOT collects data on passengers who are delayed less than an hour, no other information is available to measure the amount of time a passenger is delayed when they are denied boarding. However, based on our review of passenger complaints, we found instances where passengers reported having to wait until the following day to board a flight with available seats. Airlines Have Taken a Range of Actions to Reduce Denied Boardings and Minimize Their Effects on Passengers Decreases in involuntary denied boardings are due in part to recent airline actions. As mentioned previously, involuntary denied boardings can be costly for both passengers whose travel plans are disrupted, and airlines that have to compensate passengers for such disruptions and then face criticism for denying boarding to passengers with confirmed seats. As a result, airlines have taken a range of actions, primarily intended to reduce such incidents. Some of these actions also provide additional incentives for passengers to volunteer to be denied boarding. Moreover, stakeholders, including consumer advocates and an association representing airlines, agreed that voluntary denied boardings are preferred to involuntary denied boardings, given that airlines and passengers willingly accept the outcome. Reducing the rate or eliminating overbookings. Some airlines have reduced their rate of overbooking or eliminated them altogether in an effort to reduce voluntary and involuntary denied boardings, according to stakeholders and our prior work. In our 2018 report, representatives from three airlines told us their airline had reduced or stopped overbooking flights. Our review of seven airlines’ customer service documents found that two airlines explicitly stated that they do not overbook their flights. Improving the ability to predict no-shows or rebook passengers. According to representatives from an industry association representing airlines, airlines have made investments to improve their software for predicting the number of passenger no-shows in an effort to reduce voluntary and involuntary denied boardings. These representatives also told us that airlines have hired additional personnel dedicated to more precisely forecasting no-show rates and proactively identifying rebooking options for passengers who are denied boarding. Improving communication with passengers. Some airlines have taken steps to notify passengers about potential denied boardings earlier in the travel process—in some cases before travelers have left for the airport—in an effort to encourage volunteers, according to stakeholders we interviewed. These stakeholders said that providing advance notice likely further reduces any burden on passengers associated with changing their travel plans. In 2018, five of the nine airlines we interviewed told us they had begun soliciting volunteers to give up their seat earlier in the process. More specifically, according to representatives from an industry association that represents airlines, some airlines call passengers prior to their arrival at the airport to gauge their willingness to give up their seat. Other airlines solicit volunteers at the check-in kiosk, which limits the need for airlines to identify passengers during the boarding process at the gate. None of the stakeholders we interviewed described any communication methods that were specific to passengers with disabilities. Nevertheless, as previously mentioned, four airlines (out of seven) explicitly state in their contracts of carriage that they generally do not deny boarding to passengers with disabilities. Increasing and diversifying compensation for passengers. Some airlines have offered additional incentives or increased compensation amounts to encourage passengers to voluntarily give up their seat. While airlines have historically provided passengers with travel vouchers to solicit volunteers, some have started offering alternative forms of compensation, such as gift cards for Amazon and other retailers, iPads, or travel vouchers with fewer restrictions or that also cover ancillary fees. Our review of DOT data indicates that relative to the number of passengers denied boarding involuntarily, more passengers have volunteered to give up their seat, lessening the need to deny passengers boarding involuntarily. For example, in 2012, for every one passenger denied boarding involuntarily, about nine volunteered to be denied boarding. In contrast, in 2018, for every one passenger denied boarding involuntarily, about 33 volunteered to be denied boarding. Providing passengers with the opportunity to propose acceptable voluntary denied boarding compensation. Some airlines solicit passengers with flexible travel plans to identify compensation amounts they would willingly accept in exchange for voluntarily giving up their seats and taking another flight. Once passengers submit their required compensation amount to the airline, the airline can then use that information to select passengers with the lowest amount of required compensation to accept a denied boarding. This process allows airlines to, among other things, potentially avoid involuntary denied boardings, and identify which passengers require the least compensation in exchange for their travel flexibility. Airlines conduct this process on their website, via their mobile app, or at the check-in kiosk. In some cases, passengers who would consider changing their plans in exchange for compensation provide the airline with a specific dollar amount that they would be willing to accept to give up their seat. In other cases, airlines require each passenger to select a predetermined amount of compensation that they would accept to give up their seat, as illustrated in figure 4. For example, based on the figure below, an airline that oversold its flight would select a passenger who volunteered to give up their seat in exchange for $250, assuming at least one passenger selected that amount. If no passengers selected that amount, the airline would identify a passenger with the next lowest amount—in this case, $350. Our review identified at least three airlines that use this type of process to solicit volunteers to give up their seats. Providing additional tools to employees. According to stakeholders we interviewed, airlines have given their employees more discretion regarding the offers they can make to encourage passengers to volunteer to be denied boarding on an oversold flight, or provide training on handling such incidents. While representatives from both consumer advocate organizations we interviewed generally supported some of the airlines’ actions to manage oversold flights, they also identified additional actions that airlines or DOT could take. Both consumer advocates we spoke to would like to see airlines increase transparency and passenger education related to denied boarding compensation. For example, these advocates believe that prior to agreeing to be voluntarily denied boarding, airlines should be required to inform passengers: (1) of the current compensation amounts for involuntary denied boardings, and (2) that compensation can be provided by cash or check (as opposed to a voucher). Having such information would allow passengers to make more informed decisions about the compensation they would willingly accept to be voluntarily denied boarding. Additionally, one consumer advocate said explicitly that they would also like airlines to inform passengers who are involuntary denied boarding that compensation amounts set by DOT are minimum amounts. Regarding potential additional actions, the FAA Reauthorization Act of 2018 required that DOT issue a rulemaking clarifying, among other things, that the compensation amounts set by DOT for involuntary denied boardings are the minimum compensation amounts that passengers can receive. In October 2019, DOT officials indicated that DOT intends to issue its final rule in July 2020. Moreover, in November 2018, we made three recommendations to DOT to improve its passenger education efforts by, among other things, capturing feedback from passengers directly, and identifying available short- and long-term budgetary resources for these efforts. DOT agreed with our recommendations and is in the process of implementing them. More broadly, both consumer advocates we interviewed called for an end to overbookings. This could be achieved either voluntarily by airlines or in regulation by DOT. These advocates said that overbooking is an outdated practice that protected airlines from high no-show rates during a time when passengers could make multiple reservations and did not incur change fees. Given that this is no longer the case, it is not necessary for airlines to overbook their flights, according to these consumer advocates. They also pointed out that airlines have significant flexibility in their business operations, including, denying boarding when a flight is overbooked, or changing flight schedules. In contrast, passengers have little, if any, recourse if they need to change their travel plans. Most tickets have restrictions that prevent passengers from making changes to their flights without incurring high change fees. Consumer advocates believe that eliminating overbooking would have limited effects on airlines, given the restrictions on passengers’ tickets. According to three airline revenue management specialists, if airlines were prohibited from overbooking flights, they would likely end up operating aircraft with more empty seats, compared to current trends. Moreover, they also noted that if flights were less full, there could be certain negative implications for airlines and passengers. For example, when fewer seats on a flight are filled with paying passengers, airlines’ average costs per passenger are higher because many aspects of airlines’ operational costs—such as salaries for crew, mechanic services, and airport landing fees—are generally the same, regardless of the number of passengers onboard. These same revenue management specialists also noted that a greater number of empty seats will generally decrease airline’s revenue. One of them estimated that the reduced revenues could amount to tens of millions of dollars. Some airlines would also likely change their revenue management practices, according to airline revenue management specialists. Those changes would largely focus on how airlines price their tickets. While two airlines have made a business decision not to overbook and have accepted the financial trade-off, revenue management specialists said that eliminating overbooking would be difficult for other airlines. In particular, all three revenue management specialists agreed that if airlines were prohibited from overbooking, some airlines may offer fewer discounted fare tickets. Two revenue management specialists also said that it is likely that airlines would increase the average fare across all tickets slightly to account for the increased costs and potential lost revenue. Finally, one revenue management specialist also said that airlines might add additional restrictions on tickets, such as by increasing penalties associated with a passenger not showing up for their flight or cancelling their ticket at the last minute. Moreover, even if airlines stopped overbooking, some passengers would still be denied boarding because factors other than overbooking—including some that are beyond the airline’s control—can lead to denied boardings. Agency Comments We provided a draft of this report to DOT for review and comment. DOT provided technical comments, which we incorporated as appropriate. We are sending copies of this report to the appropriate congressional committees, the Secretary of the Department of Transportation, and other interested parties. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you or your staff have questions concerning this report, please contact me at (202) 512-2834 or VonahA@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix I. Appendix I: GAO Contact and Staff Acknowledgments GAO Contact Andrew Von Ah, (202) 512-2834 or VonahA@gao.gov. Staff Acknowledgments In addition to the individual named above, other key contributors to this report were: Ed Laughlin (Assistant Director); Amy Suntoke (Analyst-in- Charge); Amy Abramowitz; Sarah Arnett; Melissa Bodeau; Colson Campbell; Lori Fields; Dave Hooper; Mary-Catherine Overcash; Malika Rice; Pam Snedden; Melissa Swearingen; and Elizabeth Wood.


Background Post-9/11 GI Bill Benefits VA has been providing veterans educational assistance benefits since 1944. We previously reported that these benefits have been put in place over time to compensate for compulsory service, encourage voluntary service, avoid unemployment, provide equitable benefits to all who served, and promote military retention. The Post-9/11 GI Bill, which took effect on August 1, 2009, is now VA’s largest educational program. This program generally provides benefits to veterans who served on active duty for at least 90 days beginning on or after September 11, 2001. Full benefits are generally available to those who served on active duty for 36 months, for which VA will pay the net cost for in-state tuition and fees at public schools and up to an annual maximum amount at nonprofit and for- profit schools ($24,477 in academic year 2019-2020). VA pays schools directly for tuition and fees and sends additional payments for housing and books directly to veterans who are eligible for these payments. To receive education benefits through the Post-9/11 GI Bill, students submit applications to VA, schools certify enrollments, and VA processes claims and payments. Other Sources of Student Aid For help covering the costs of their postsecondary education, veterans may also be eligible for grants and loans available from federal student aid programs administered by Education, such as Pell Grants and Direct Loans. According to Education data, an estimated 32 percent of student veterans had received Pell Grants and 28 percent had taken out Direct Loans, during school year 2015-16. VA education payments, such as Post-9/11 GI Bill benefits, are not considered when calculating eligibility for federal student aid and do not affect the amount of aid a veteran can receive from Education. Student veterans may also be eligible for state and institutional aid (scholarships from state governments or schools, for example). Student Veterans Attend a Wide Range of Schools, but a Small Number of Schools Receive a Large Share of Post- 9/11 GI Bill Payments Nearly 700,000 student veterans received Post-9/11 GI Bill tuition and fee benefits to attend almost 6,000 schools in fiscal year 2017. VA paid about 40 percent of the Post-9/11 GI Bill tuition and fee payments to public schools, 30 percent to nonprofits, and 30 percent to for-profits (see fig. 1). Most student veterans used Post-9/11 GI Bill tuition and fee payments to attend schools that provided 4-year undergraduate programs (see fig. 2). Veterans may also use Post-9/11 GI Bill benefits for training opportunities at schools that do not offer college degrees, including training in areas such as driving, emergency medical training, and barber or beautician skills. These programs received about $360 million Post-9/11 GI bill tuition and fee payments in fiscal year 2017. A relatively small number of schools received a large share of Post-9/11 GI Bill tuition and fee payments. In fiscal year 2017, the 50 schools that received the highest total amount of Post-9/11 GI Bill tuition and fee payments accounted for over 30 percent of all such benefits, collectively receiving $1.4 billion for over 190,000 beneficiaries. These 50 schools consisted of 14 public, 16 nonprofit, and 20 for-profit schools (see fig. 3). In fiscal year 2017, the 50 schools received between $11 million and $191 million each in tuition and fee payments and enrolled between around 350 and 28,000 Post-9/11 GI Bill beneficiaries. In contrast, among all schools receiving Post-9/11 GI Bill benefits in fiscal year 2017, the majority of them enrolled fewer than 15 veterans. Student Outcomes Varied Among Schools That Received a Large Share of Post-9/11 GI Bill Payments Student outcomes at the 50 schools that received the most Post-9/11 GI Bill tuition and fee payments were, on average, generally comparable to the national average, but varied more widely across sectors. Since available data on student veteran outcomes is currently limited, we analyzed common outcome measures for the broader student populations at each school: 4-year program graduation rates: the percent of first-time full-time students who completed a 4-year program within 6 years. Full- and part-time retention rates: the percent of first-time students who enrolled in one fall and either successfully completed their program or re-enrolled in the next fall. When examined as a whole, the average student outcomes for the 50 schools that received the most Post-9/11 GI Bill tuition and fee payments were generally comparable to the national average. For example, the average 4-year program graduation rate at the top 50 schools was 61— the same as the national average. For one of the outcome measures— full-time retention rate—the average was higher for the top 50 schools (83 percent) than the national average (75 percent). Within the 50 schools that received the most Post-9/11 GI Bill tuition and fee payments, student outcomes varied across schools in different sectors (see fig. 4). For-profit schools had lower 4-year program graduation and retention rates compared to public and nonprofit schools among these 50 schools, although there was wide variation among schools in each sector. School Closures Affect Thousands of Student Veterans Although a relatively small number of schools close each year, these closures can affect thousands of student veterans. In 2017 we reported that about 95 schools closed in school year 2015-16, according to Education data, which was higher than in previous years, primarily due to a rise in for-profit school closures (see fig. 5). Schools can close in different manners and for a variety of reasons, including declining enrollments, financial problems, loss of accreditation, and legal actions. When a school ceases operations in an orderly process over several months it gives students time to complete the current school term and make arrangements to transfer and continue their education at another school. The effect of school closures is often worse when the closures occur abruptly with little or no advance warning, because these schools generally do not have time to establish transfer arrangements that allow students to easily continue their education at another school. Abrupt closures of large schools, although infrequent, can affect thousands of student veterans and result in large financial losses for the federal government and taxpayers. For example, Corinthian Colleges Inc. (Corinthian) enrolled more than 72,000 students before its closure in April 2015. The following year, ITT Educational Services Inc. (ITT), another large for-profit provider of higher education, closed all of its 136 campuses in September 2016, affecting more than 35,000 students. More than 7,000 Post-9/11 GI Bill students were pursuing educational programs at schools operated by ITT and Corinthian at the time of their closures, according to VA. More recently, closures at Education Corporation of America in 2018 and Dream Center Education Holdings in 2019, which operated schools under multiple brands, including Argosy University and several campuses of The Art Institutes, affected tens of thousands of students, including thousands of Post-9/11 GI Bill recipients. Student veterans attending a school that closes may be eligible to have some or all of their Post-9/11 GI Bill benefits restored. As a result of the Harry W. Colmery Veterans Educational Assistance Act of 2017, VA restores GI Bill entitlements to eligible beneficiaries affected by recent and future school closures. Student veterans may also be entitled to a discharge on eligible federal student loans they may have received from Education or to have their Pell Grant eligibility restored if they are unable to complete a program because their school closed. Despite these options for having benefits restored and loans discharged, school closures can still create hardships for veterans. As we have previously reported, college students in general can face challenges transferring credits and continuing their education at a new school under any circumstances. Students who transferred lost, on average, an estimated 43 percent of their credits, and credit loss varied depending on the transfer path, based on data from 2004 to 2009. For example, students who transferred between public schools—the majority of transfer students—lost an estimated 37 percent of their credits. In comparison, students who transferred from for-profit schools to public schools—which happens less frequently—lost an estimated 94 percent of their credits. Even if a student’s credits transfer, they may not apply toward fulfilling degree requirements for their intended major. In these cases, a student will likely have to take additional courses at their new school, which could potentially delay graduation and result in additional costs to pay for repeated courses. Further, some student veterans with credits that do not transfer may exhaust their Post-9/11 GI Bill benefits before completing their degree. School closures can also exacerbate other challenges veterans may face pursuing their education. As we have previously reported, many student veterans already cope with challenges transitioning from the military to an academic environment. For example, they can face challenges navigating the academic bureaucracy, whether in attempting to receive transfer credit for previous college courses or in determining what other sources of financial aid may be available to them. Many student veterans are also trying to balance school with family and work obligations or dealing with the effects of combat-related physical and psychological injuries. When a school closes, the burden of finding and enrolling in a new school may be especially difficult for these veterans. Closures can also pose a financial risk for the government and taxpayers to the extent that Post-9/11 GI benefits are restored and federal student loans are discharged. For example, in 2017 the Congressional Budget Office estimated that restoring Post-9/11 GI Bill benefits and other VA education benefits to student veterans who attend schools that closed will increase direct spending by $320 million over the 10 year period from 2018 to 2027. School closures can also result in hundreds of millions of dollars in financial losses for the federal government and taxpayers due to discharged federal student loans. In conclusion, the Post-9/11 GI Bill has provided valuable education benefits to millions of veterans who attend a wide range of schools. However, when schools abruptly shut their doors, it can leave student veterans—who already face unique challenges in an academic environment—without a clear path to continuing their education and can force taxpayers to cover the cost of restoring their benefits and discharged student loans. Student veterans who continue their education at another school may also find that many of the credits they earned will not ultimately help them after they transfer, delaying their degrees and resulting in additional costs. As the number of school closures has increased in recent years, the risks and challenges associated with such closures are particularly salient for student veterans, their families, and the federal government. Chairman Levin, Ranking Member Bilirakis, and Members of the Subcommittee, this completes my prepared statement. I would be pleased to respond to any questions that you may have at this time. GAO Contact and Staff Acknowledgements If you or your staff have any questions about this testimony, please contact Melissa Emrey-Arras, Director, Education, Workforce, and Income Security Issues at (617) 788-0534 or emreyarrasm@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement. GAO staff who made key contributions to this testimony include Will Colvin (Assistant Director), Brian Schwartz (Analyst-in-Charge), and Jeffrey G. Miller. In addition, key support was provided by James Bennett, Deborah Bland, Benjamin DeYoung, Alex Galuten, Theresa Lo, John Mingus, Corinna Nicolaou, and Michelle St. Pierre. This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.