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Post-9/11 GI Bill Overpayments Levy Expensive Burden on Veterans and Schools

November 2, 2015

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 from the Government Accountability Office (GAO).

Of the $10.8 billion the Department of Veterans Affairs (VA) disbursed, $416 million resulted in overpayments that either veterans or schools must pay back—up nearly 20 percent from overpayments made in FY13. About a quarter of the 790,000 student beneficiaries were affected.

Overpayments are most often triggered by enrollment changes veterans make without realizing they'll incur debt from doing so, according to the report. About 90 percent of "high-dollar" overpayments (more than $1,667) occurred when a veteran changed his or her enrollment status, such as by dropping a course or withdrawing altogether. Since the VA disburses tuition funds as a lump sum before the semester starts, an enrollment change will lead to unused funds that either the veteran or his or her institution must return. But the VA doesn't articulate 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 a student makes an enrollment change before the semester starts or never attends a class, among other scenarios. To avoid overpayments, the GAO report recommends schools use a two-step certification process for veterans, which NACUBO has recommended as well. Under dual-certification, institutions first submit to the VA a veteran's term dates and credits, with charges listed as $0.00, so the student will start receiving a housing allowance without delay. After the end of the term's drop/add period, institutions then submit an amended enrollment certification listing actual charges, which helps to ensure a correct program payment from the VA.

While the process helps prevent overpayments, only 30 percent of the 239 institutions surveyed by NACUBO for the 2015 Student Financial Services Policies and Procedures Study were using it. 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 surmised. "[B]y 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."

The GAO report also cited the VA's lack of mandatory training for school certifying officials as an issue driving up overpayment cases. School 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 schools' responsibilities and GI Bill payment processes, the minimum training isn't mandatory and thus isn't often completed.

Communication issues from the VA are compounded by its debt notification process, the GAO report notes. VA mails two separate overpayment notices to students and schools, 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. The department also said it will consider new notification methods for veterans and institutions affected by overpayments.

Contact

Bryan Dickson
Senior Policy Analyst
202.861.2505
E-mail