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Department of Veterans Affairs

Post 911 GI Bill saves $5mil/yr with monthly statements

Send monthly statements and offer e-statements for Post 9-11 GI Bill payments/benefits instead of a letter ad hoc for each action.

 

It is estimated that the cost of sending letters to Veterans under the Post 9-11 GI Bill program is nearly $540,000 every month, or $6.48 million/ year, to send out multiple letters on an ad hoc basis to Veterans. This number could be reduced to $180,000, or 2.16 million/ year, or less in a few simple steps.

 

Instead of sending out a letter each time any change is made or action taken on a Veteran’s Post 9-11 GI Bill account, send out a monthly statement.

 

Currently, each time a student/ Veteran has a change to their school program, housing, or education benefits a letter is drafted with the change to whatever item. For example, if a school term ends mid-May and the summer term starts at the end of May, there is a gap in payment for housing. The Veteran receives a letter stating they owe money for an excess housing stipend. However, once the new summer term “kicks in” the Veteran receives another letter stating the new adjustment figure and notes that they now owe nothing, essentially making both letters redundant and unnecessary.

 

It is estimated that each Veteran under the Post 9-11 GI Bill receives between 2 and 4 letters via USPS mail each month. For the sake of assumption we’ll use the number 3 for math since there is no real data on hand. There are nearly 250,000 Veterans under the Post 9-11 GI Bill and growing. That means roughly 750,000 letters each month are mailed just for the Post 9-11 GI Bill (i.e. not including the original GI Bill, Vocational Rehabilitation, Disability Compensation, etc.).

 

Each letter is generated by some action – schools submit enrollment, a Veteran applies, a Veteran graduates, etc. This interaction will occur in the system no matter how we send out the communication to students about their account so I’ve not included those costs.

 

The costs and waste that can be eliminated is the cost and time associated with printing all of these correspondences, folding, and stuffing the envelopes, and paying postage. Even though much of the process is automated, there is still a cost associated with it. Since we’re reducing and not eliminating the letters, utilizing the cost estimate of the average federal civilian employee will present an accurate picture for comparison. According to www.cato.org, the average federal civilian salary in 2008 was $79,197. When broken down, that amounts to about $0.64 cents/ minute. Even if, at cost, it was $.02 cents for 2 printed pages for the paper and ink, $.01 cents for the envelope, and took 30 seconds in total time to queue, print, fold, stuff, and stamp, we could estimate the time and materials cost per letter at $.03 cents (material) + $.32 cents (time) + $.37 cents (postage)= $.72 cents. This rate times the 750,000 letters sent out each month (3 letters on average to 250,000 Veterans) means the cost is likely $540,000/ month on sending account/ action update letters to Veterans using the Post 9-11 GI Bill.

 

Using the same estimated costs for materials, time, and postage, if instead we utilized or expanded the same technology, systems, equipment, and personnel to send out 1 monthly consolidated account statement, similar to most banking statements, that lists any activity on a Veterans account that month, any action required of the Veteran, and a summary of remaining benefits we would be sending 1 letter to each Veteran. That would mean 250,000 letters sent at $.72 cents for a total cost of $180,000/month.

Furthermore, this would present an environmentally friendly solution. A mailing that consisted of 1 envelope and 2 sheets of paper weights approximately .48 oz. Sending 750,000 mailings/month would total 22,500 lbs, or about 11 tons of paper/ month. Reducing the mailings to a single consolidated monthly statement will reduce waste products to around 7,500 lbs/month, or just fewer than 4 tons/month. On an annual basis, that would reduce paper waste from 270,000 lbs to 90,000 lbs/ yr.

 

Finally, by utilizing modern technology and making these monthly statements available online for those who opt-in would further reduce costs and waste. Such a system is already available in nearly turn-key formats from multiple vendors. Even if a custom solution was built for e-statement delivery, data storage, and data population the total cost would have a very difficult time exceeding $100,000 for a custom built solution. If only 25% of Veterans in the Post 9-11 GI Bill program opted for the e-statement instead of paper the cost savings in mailed statements would save an additional $45,000/month in time and materials, and 1,000 lbs/month in paper waste. Thus the technology would pay for itself in no more than 3 months. In fact, it would take longer to build than it would take to pay for itself.

 

In conclusion, by utilizing all of the methods above Veterans will be served better by providing them more concise, clear information in a consolidated monthly statement. Further, by sending this consolidated statement instead of the ad hoc method currently used, we will reduce spending by up to $4.86 million/ year and reduce waste by up to 192,000 lbs per year (depending on the construction and adaptation of e-statements).

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Idea No. 471