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Federal File

Coverage of legislation and regulatory activity that affects higher education

By Bryan Dickson

GAO Reports Spike in Post–9/11 GI Bill Overpayments

Overpayments from the Post–9/11 GI Bill Program rose significantly, and often unnecessarily, in FY14, burdening more veterans and the institutions that serve them. According to a new report—Post–9/11 GI Bill: Additional Actions Needed to Help Reduce Overpayments and Increase Collection—of the $10.8 billion disbursed by the Department of Veterans Affairs (VA), $416 million resulted in overpayments that either veterans or institutions must pay back. Released this fall by the Government Accountability Office (GAO), the analysis notes that this total is up nearly 20 percent from overpayments made in FY13. Currently, there are 790,000 student beneficiaries and nearly a quarter of them were affected.

Reasons Revealed

To avoid overpayments, the GAO report recommends that schools use a two-step certification process for veterans, which NACUBO has recommended as well.

According to the report, overpayments are most often triggered by enrollment changes that veterans make without realizing they will incur debt. Approximately 90 percent of "high-dollar" overpayments—amounts totaling more than $1,667—occurred when a veteran changed his or her enrollment status, either by dropping a course or withdrawing altogether.

Since the VA disburses tuition funds in a lump sum before the start of the semester, an enrollment change will lead to unused funds that either the veteran or the institution must return. Unfortunately, the VA doesn't explain the consequences of enrollment changes when veterans sign up to receive the benefit—leaving many blindsided when they realize they owe an often-expensive debt.

Overpayments also burden institutions, which are responsible for the payment if, for instance, a student makes an enrollment change before the semester starts or never attends a class.

Suggested Solutions

To avoid overpayments, the GAO report recommends that schools use a two-step certification process for veterans, which NACUBO has recommended as well. Under dual-certification, institutions would be required to submit to the VA the veteran's term dates and credits, with charges listed as zero so that students can receive their housing allowance without delay.

Further, at the end of the term's drop/add period, institutions would then submit an amended enrollment certification, which lists actual charges. These steps will help ensure a correct program payment from the VA.

Slow Adoption

While the dual-certification process helps prevent overpayments, only 30 per-cent of the 239 institutions surveyed by NACUBO for the 2015 Student Financial Services Policies and Procedures Study were using it on their respective campuses. The program "has not been widely adopted, in part because VA's guidance to schools does not explain the benefits of using this process," the GAO report noted. "By not providing guidance to schools about the benefits of using dual-certification, VA is missing an opportunity to reduce a potentially large number of overpayments as well as the burden placed on veterans and schools to repay those debts." Two-step certification is more work upfront, but is recommended by the VA to cut down on debt situations.

A number of institutions have indicated to NACUBO that having a certifying official in the bursar's office has vastly improved the process for schools and veterans.

NACUBO's 2015 study found that research universities were the largest adopters of two-step certifications and at a majority of the institutions the registrar's office had primary responsibility for certification.

Among institutions with a primary certifying official in the registrar's office, about 13 percent of schools also had an additional certifying official in the student accounts, student financial services, or bursar's office. Another 11 percent had an additional certifying official in the financial aid office. A number of institutions have indicated to NACUBO that having a certifying official in the bursar's office has vastly improved the process for schools and veterans.

George Mason University, Fairfax, Va., allows class adjustments during the first four weeks of the semester. "We discovered that certifying tuition after the drop deadline both minimizes veteran debt and simplifies our VA payment process," says Pat Quinn, George Mason's director of student fiscal services. "Classes are certified with zero dollars as students register, so that book and housing stipends disburse, and then are later updated with tuition. While this is extra complexity for staff, it helps our veterans, is beneficial for retention, and minimizes school and student VA debt."

Training Challenges

Student Financial Services Policies and Procedures

NACUBO's 2015 Student Financial Services Policies and Procedures report illuminates a wide range of college and university financial service issues. The information collected through NACUBO's survey and presented here provides a window of insight into the activities, systems, and practices from NACUBO-member institutions across the country. The review of tuition structures, collections procedures, financial literacy programs, as well as many other facets of the student financial services framework is meant to aid policymakers within academic institutions in shaping business practices that more effectively meet the needs of institutions and students alike. For more information and to access the report, visit the "Products" page on the NACUBO website.

Did You Know?

NACUBO hosts a VA Processes eGroup, an online environment where you can share information, make contacts, and generate discussions with your colleagues in higher education on the processes and systems in place for administering Post–9/11 GI Bill benefits. Subscribe today by visiting MY NACUBO at www.nacubo.org.

The GAO report also cited the VA's lack of mandatory training for certifying officials as an issue driving up overpayment cases. Institution errors led to about 8 percent of high-dollar overpayments in FY14, often when certifying officials misreported enrollment dates or misunderstood allowable fees. While the VA offers a manual and an online course on institution responsibilities and GI Bill payment processes, the minimum training isn't mandatory and, thus, is not often completed.

Communication issues from the VA are compounded by its debt notification process, the GAO report notes. The VA mails two separate overpayment notices to students and institutions, each at least a month apart-and neither presents a full picture of both the debt owed and how to repay. The information is often mailed to addresses that are either inconvenient (for schools) or outdated (for veterans); no information is communicated electronically.

In response to the report, the VA has agreed to address each issue delineated—pledging to provide more information to veterans on the consequences of an enrollment change and to institutions on the benefits of dual certification, among other action items. Department officials also said that the VA will consider new notification methods for veterans and institutions affected by overpayments.

NACUBO CONTACT Bryan Dickson, senior policy analyst, 202.861.2505

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