Post-9/11 GI Bill:

Additional Actions Needed to Help Reduce Overpayments and Increase Collections

GAO-16-42: Published: Oct 21, 2015. Publicly Released: Oct 21, 2015.

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Melissa Emrey-Arras
(617) 788-0534
emreyarrasm@gao.gov

 

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What GAO Found

The Department of Veterans Affairs (VA) identified $416 million in Post-9/11 GI Bill overpayments in fiscal year 2014, affecting approximately one in four veteran beneficiaries and about 6,000 schools. Overpayments most often occur when VA pays benefits based on a student's enrollment at the beginning of the school term and the student later drops one or more classes (or withdraws from school altogether). Students therefore receive benefits for classes they did not complete, and the “overpayment” must be paid back to VA. A small percentage of overpayments occurred because of school reporting or VA processing errors. GAO found that most overpayments were collected quickly, but as of November 2014 (when VA provided these data to GAO), VA was still collecting $152 million in overpayments from fiscal year 2014, and an additional $110 million from prior years, primarily owed by veterans with the remainder owed by schools.

Inadequate guidance, processes, and training have limited VA's efforts to reduce overpayments caused by enrollment changes and school errors.

Guidance for veterans. Many veterans may not realize they can incur overpayments as a result of enrollment changes because VA provides limited guidance to veterans on its policies. As a result, veterans may be unaware of the consequences of enrollment changes until after they have already incurred their first overpayment debt, according to school officials. Because VA is not effectively communicating its program policies to veterans, some veterans may be incurring debts that they could have otherwise avoided.

Enrollment verification process. While veterans using other VA education programs have to verify their enrollment each month, VA generally does not require those using the Post-9/11 GI Bill to do so. By not requiring veterans to verify their enrollment every month, which can cause significant time to lapse between when veterans drop courses and when this is reported, VA's process allows veterans to incur thousands of dollars in overpayments and also increases the program's costs associated with collecting these debts.

Training for school officials. Overpayments also occur when schools make errors, such as reporting enrollment information incorrectly, which VA officials said is sometimes attributable to a lack of training. For example, some school officials routinely made systematic errors reporting enrollment information, creating thousands of dollars in overpayments. Not all school officials attend the different training opportunities VA offers and VA officials said the agency lacks the authority to require school officials to participate in any of them. VA officials said they would like school officials to take a minimum level of training, which could help reduce errors and related overpayments.

The effectiveness of VA's collection efforts is hindered by its notification methods. VA relies solely on paper mail to notify schools and veterans of overpayments. VA generally sends veterans' notices to the addresses from veterans' initial benefit applications. However, these addresses can often be out-of-date, so some veterans do not receive the letters, leaving them unaware of their debts. This can cause veterans to unknowingly miss deadlines for disputing their debts and leave them unprepared to cover living expenses if VA begins withholding future benefit payments or offsetting tax returns for collection. This can also lead to delays in the collection of overpayments from veterans.

Why GAO Did This Study

VA provided $10.8 billion in Post-9/11 GI Bill education benefits to almost 800,000 veterans in fiscal year 2014. GAO was asked to review overpayments for the program, which can create financial hardships for veterans who are generally required to pay them back and which can result in a significant loss of taxpayer dollars if they are not collected.

This report examines (1) the extent of overpayments, (2) how effectively VA has addressed their causes, and (3) the effectiveness of VA's collection efforts. GAO analyzed overpayment data for fiscal years 2013 and 2014, examined the causes from a generalizable sample of high-dollar overpayments (greater than $1,667), conducted a case file review of 20 overpayments (selected for a variety of causes), and reviewed VA's monitoring of overpayments. GAO also interviewed senior and frontline staff at two VA offices that process claims and collect debts, officials at nine schools (selected for variation in program length and their status as public, nonprofit, and for-profit), higher education associations, and veteran service organizations.

What GAO Recommends

Congress should consider granting VA explicit authority to require training for school officials. In addition, GAO is making a number of recommendations to improve VA's guidance and processes, including providing program guidance to veterans, verifying veterans' monthly enrollment, and developing additional debt notification methods. VA agreed with GAO's recommendations to the agency and plans to address these issues.

For more information, contact Melissa Emrey-Arras at (617) 788-0534 or emreyarrasm@gao.gov.

Matter for Congressional Consideration

  1. Status: Open

    Comments: Two bills in 114th Congress, the Veterans Education Enhancement Act of 2016 (H.R. 5174), as introduced, and the Veterans Success on Campus Act of 2016 (H.R. 5178), as reported out of committee, would have required VA to establish training requirements for school certifying officials but were not enacted.

    Matter: To address Post-9/11 GI Bill overpayments resulting from school errors, Congress should consider granting VA explicit authority to require a minimum level of training for appropriate school officials.

Recommendations for Executive Action

  1. Status: Open

    Comments: VA agreed with our recommendation and reported in October 2016 that the Debt Management Center began providing the Veterans Benefits Administration with recurring quarterly overpayment reports starting in July 2016. These reports include a list of the 100 schools with largest school overpayment debts and another list of the largest 100 student debts. VA has also created internal guidance for using these reports to monitor debts, identify the root causes, and determine if a risk-based compliance review is needed for educational institutions. This guidance also details how VA will compare each report to determine if there is a trend of increasing/decreasing school and student debts. While analyzing the 100 largest debts can provide some useful information, we believe it would be beneficial for VA to also regularly collect and analyze more comprehensive information on the total number and amount of overpayments and the causes of these overpayments.

    Recommendation: To improve the administration of the Post-9/11 GI Bill, reduce the occurrence of overpayments, and increase debt collections, the Secretary of Veterans Affairs should improve program management by expanding monitoring of available information on overpayment debts and collections. This could include regularly tracking the number and amount of overpayments created and the effectiveness of collection efforts.

    Agency Affected: Department of Veterans Affairs

  2. Status: Open

    Comments: VA officials reported in October 2016 that the agency has drafted revisions to the initial and subsequent award letters issued to students to provide more detailed information on education benefits and the consequences of changes in enrollment, in response to GAO?s recommendation in its 2015 report. VA officials said these revisions are pending approval and the new award letters should be implemented by December 2017.

    Recommendation: To improve the administration of the Post-9/11 GI Bill, reduce the occurrence of overpayments, and increase debt collections, the Secretary of Veterans Affairs should address overpayments resulting from enrollment changes by providing guidance to educate student veterans about their benefits and consequences of changing their enrollment.

    Agency Affected: Department of Veterans Affairs

  3. Status: Open

    Comments: VA agreed with our recommendation and reported in October 2016 that it had finished revising the School Certifying Official Handbook to include information on how the dual certification process can potentially reduce overpayments. The updated handbook is schedule to be release in November 2016. In addition, VA officials said they discussed the dual certification process with schools administrators during a webinar in June 2016 and plan to send schools an official letter in December 2016 to remind them about the benefits of using the dual certification process.

    Recommendation: To improve the administration of the Post-9/11 GI Bill, reduce the occurrence of overpayments, and increase debt collections, the Secretary of Veterans Affairs should address overpayments resulting from enrollment changes by providing guidance to schools about the benefits of using a dual certification process where schools wait to certify the actual tuition and fee amounts until after the school's deadline for adding and dropping classes.

    Agency Affected: Department of Veterans Affairs

  4. Status: Open

    Comments: VA officials reported in October 2016 that the agency is developing a plan to add functionality for monthly verifications of student enrollment to its information technology systems, as GAO recommended in its 2015 report. Officials expected to complete these upgrades by December 2017.

    Recommendation: To improve the administration of the Post-9/11 GI Bill, reduce the occurrence of overpayments, and increase debt collections, the Secretary of Veterans Affairs should address overpayments resulting from enrollment changes by identifying and implementing a cost-effective way to allow Post-9/11 GI Bill beneficiaries to verify their enrollment status each month, and require monthly reporting.

    Agency Affected: Department of Veterans Affairs

  5. Status: Open

    Comments: VA agreed with our recommendation and reported in October 2016 that it is developing a plan to update its IT systems so veterans could be notified of overpayment debts through eBenefits or by email. VA plans to complete this action by December 2017.

    Recommendation: To improve the administration of the Post-9/11 GI Bill, reduce the occurrence of overpayments, and increase debt collections, the Secretary of Veterans Affairs should improve efforts to notify veterans and schools about overpayment debts by identifying and implementing other methods of notifying veterans and schools about debts to supplement the agency's mailed notices (e.g., email, eBenefits).

    Agency Affected: Department of Veterans Affairs

  6. Status: Open

    Comments: VA agreed with our recommendation and reported in October 2016 that it is working on a plan to include school term dates on debt notification letters sent to schools. VA also plans to review and modify the initial debt letters sent to students and schools to include information on both the cause of the debt and how to repay the debt. VA plans to complete these actions by December 2017.

    Recommendation: To improve the administration of the Post-9/11 GI Bill, reduce the occurrence of overpayments, and increase debt collections, the Secretary of Veterans Affairs should improve efforts to notify veterans and schools about overpayment debts by including information on both the cause of the debt and how to repay it in debt letters.

    Agency Affected: Department of Veterans Affairs

  7. Status: Open

    Comments: VA officials reported in October 2016 that the agency plans to propose revisions to its regulations to prorate tuition overpayments when veterans reduce their enrollment during the term based on the actual date of the enrollment change, as GAO recommended in its 2015 report, rather than paying benefits through the end of the month. VA officials said they are drafting these changes and plan to issue final regulations by October 2017.

    Recommendation: To improve the administration of the Post-9/11 GI Bill, reduce the occurrence of overpayments, and increase debt collections, the Secretary of Veterans Affairs should revise policy for calculating overpayments to increase collections by prorating tuition overpayments when veterans reduce their enrollment during the term based on the actual date of the enrollment change rather than paying additional benefits through the end of the month during which the reduction occurred.

    Agency Affected: Department of Veterans Affairs

  8. Status: Open

    Comments: VA officials reported in October 2016 that the agency plans to amend its procedures to account for school refund policies when calculating veterans' overpayment debts, as we recommended. VA officials said they plan to publish this information in the School Certifying Official Handbook and notify schools and student veterans about the change. However, officials also reported that the agency needs to address several issues with its information technology systems before these changes can be made. They plan to complete these actions by December 2016.

    Recommendation: To improve the administration of the Post-9/11 GI Bill, reduce the occurrence of overpayments, and increase debt collections, the Secretary of Veterans Affairs should ensure it is recovering the full amount of tuition and fee payments if a school does not charge a veteran for any tuition or fees after dropping a class or withdrawing from school. For example, VA could adjust its overpayment calculation to account for these situations or provide schools with guidance on how to account for school refund policies when reporting enrollment and tuition changes.

    Agency Affected: Department of Veterans Affairs

 

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