Further Actions Needed To Resolve VA's Education Assistance Overpayment Problem

HRD-78-45: Published: Feb 17, 1978. Publicly Released: Feb 17, 1978.

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The Veterans Administration's (VA) educational assistance programs provide funds for tuition and living expenses to veterans and eligible dependents while in training. Since 1973, overpayments of these benefits have become a serious problem. During the 3.5 years ended December 31, 1975, overpayments totaled almost $1.3 billion, of which $298.2 million remained uncollected on December 31, 1975.

At the VA Los Angeles Office, overpayments were caused by delays in reporting training changes, issuance of special payments, poor processing practices, and the prepayment and advance payment provisions of the VA educational assistance law. The VA has taken some actions on recommendations in the March 1976 GAO report, but it still needs to: acquire additional compliance survey specialists; change its listing of overpayments to show accurate current balances; identify schools which may be liable for overpayments so that prompt collection action can be taken if the courts uphold the authority of VA to do so; conduct an additional test program which considers costs and benefits for automating the processing of status changes; further reduce special payments; make better determinations of the use of teletype notices to stop overpayments; implement improvements in collection letters; and set a date for completion of a data system on overpayment collection costs. If VA concentrated on minimizing causes of overpayments, its need for an elaborate collection system would be lessened.

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