Educational Assistance Overpayments, a Billion Dollar Problem--A Look at the Causes, Solutions, and Collection Efforts

MWD-76-109: Published: Mar 19, 1976. Publicly Released: Mar 19, 1976.

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A review was conducted of overpayments made to veterans and to dependents of disabled or deceased veterans under the educational assistance programs of the Veterans Administration (VA) to determine the underlying causes of the overpayments, to identify some solutions, and to assess the VA's collection efforts. Overpayments have doubled since 1967. As of December 31, 1975, cumulative overpayments totaled almost $1.4 billion, of which $446 million was overpaid in fiscal year 1975 and $412 million in the first 6 months of fiscal year 1976. The Vietnam Era Veterans' Readjustment Assistance Act of 1972 provided for the advance payment of educational benefits at the start of an enrollment period and monthly prepayment of subsequent benefits during the enrollment period.

The following three primary causes of overpayments were found: 41 percent result from veteran and school delays in reporting training changes, such as dropping classes or withdrawing from school; 22 percent result from the issuance of special payments and poor VA processing practices; and 21 percent result from the prepayment and advance payment provisions of the VA educational assistance law. The other 16 percent of the overpayments result from normal processing requirements, some of which can also be avoided.

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