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: Closed - Implemented

    Comments: In August 2017, the Harry W. Colmery Veterans Educational Assistance Act of 2017 (Pub. L. No. 115-48) was enacted. This act generally requires VA to establish training requirements for certifying officials at schools that offer courses approved for education benefits under chapter 36 of title 38 of the U.S. Code, as GAO recommended in its 2015 report. Requiring school certifying officials to complete a minimum level of training will reduce school reporting errors that result in unnecessary overpayments.

    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: Closed - Implemented

    Comments: VA reported in January 2018 that it had completed its initial review of Post-9/11 GI Bill overpayment debts and collections. The accompanying report included an analysis of the number and amount of new overpayment debts as well as data on outstanding debts and collections. In addition, VA analyzed different samples of overpayment debts (100 largest school debts, 100 largest student debts, and 105 randomly selected student debts) to determine the cause of each overpayment. VA has used this analysis to develop and implement corrective actions to address some of the root causes of overpayments, such as developing new fact sheets for veterans about certain program requirements. VA plans to continue analyzing this information.

    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: Closed - Implemented

    Comments: VA officials reported that in February 2018 the agency began sending student veterans revised award letters in response to GAO's October 2015 recommendation. The revised award letter templates include more detailed information on education benefits and the consequences of changes in enrollment and a link to a website with additional helpful information about student overpayment debts. These revised letters will provide guidance to help VA ensure that veterans are aware of steps they can take to avoid certain types of 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 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: Closed - Implemented

    Comments: VA updated its School Certifying Official Handbook in April 2018 to include guidance on how dual certification can reduce overpayments. In addition, VA reported that it has been discussing the dual certification method during webinars with school administrators, most recently in November 2017, and will continue to discuss it at future webinars and outreach events.

    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 January 2018 that the agency is developing a plan to augment its information technology systems so that student enrollment can be verified each month, as GAO recommended in its 2015 report. Officials said that they awarded a new IT contract in September 2017 to begin work on this effort and they expect to complete these upgrades by December 2018.

    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 officials reported in January 2018 that the agency awarded a new IT contract in September 2017 to begin work on these efforts and they expect to complete these upgrades by December 2018.

    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: Closed - Implemented

    Comments: VA officials reported that in February 2018 the agency began sending student veterans revised initial debt notification letters that explained the cause of the debts and newly added information about how to repay these debts. In addition, VA has also modified the debt collection letters it sends out to schools to include information on the enrollment dates associated with the overpayment debt.

    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 January 2018 that the agency is revising its tuition overpayment regulations to address the recommendation in GAO's 2015 report. VA officials said that they had produced a draft of these regulatory revisions and plan to complete the regulatory updates by October 2018.

    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 January 2018 that the agency plans to amend its procedures to account for school refund policies when calculating veterans' overpayment debts, as GAO recommended in its 2015 report. VA officials said that 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. Officials said that they awarded a new IT contract in September 2017 to begin work on these efforts and they expect to complete these upgrades by December 2018.

    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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