Over the years many veterans have found themselves in a situation in which they owe the VA for an “overpayment” of GI Bill benefits. The number veterans experiencing indebtedness to the VA has increased since the Post-9/11 GI Bill went into effect. There are several situations in which a veteran may find themselves owing the VA for GI Bill overpayments, but the most common cause of indebtedness is veterans changing their enrollment, especially those changes which occur after the school’s drop/add deadline.
The VA says that if you decrease your training time (i.e. drop classes, leave school, etc.) and they have already processed a payment for tuition and fees an overpayment will occur. When the School Certifying Official (SCO) notifies the VA of a change, a debt is created against your account.
The school will issue any refunds in accordance with their internal policy, which may not fully cover the debt with the VA. If the amount refunded by the school does not satisfy the debt, the student is responsible for the remaining balance.
A decrease in credit hours can also result in changes the student's housing allowance and books and supplies stipend. If VA has already issued a payment for the term a debt will be created on veteran’s account.
The VA says that students are responsible for keeping track of their tuition and fee account balance and payments. They recommend that students visit their school's financial office regularly to review their account, ensure the charges are correct and that payments and refunds are processed correctly. They also recommend that students contact their school’s certifying official to ensure the certification information they send matches their class schedule.
Mitigating Circumstances - In some cases the VA is willing to forgive an overpayment due to mitigating circumstances.
According to the VA, if a student drops a course or withdraws from school after the drop period and receives a non punitive grade* the VA will reduce benefits effective the first day of the term unless there are mitigating circumstances.
Mitigating circumstances are circumstances beyond the student's control that prevent the student from continuing in school or that cause the student to reduce credits. Mitigating circumstances include the following:
When a student terminates or drops classes after the drop period and a non punitive grade is assigned -- and mitigating circumstances are an issue -- adequate evidence of mitigating circumstances must be provided with the Notice of Change in Student Status. If this evidence is not provided, the VA will not pay for the course or courses in question, leaving the student responsible to pay the school for any remaining tuition and fees.
If the student has already been paid for the course or courses VA will create an overpayment (subject to the 6-credit hour exclusion described below) from the beginning of the term, quarter, or semester.
For example, the SCO may enter the following: “Student withdrew 5/6/15 following Father’s death on 4/30/15.” Submitting the reason for the reduction or withdrawal at the time the change is reported will help the student avoid or reduce an overpayment if the change is for an acceptable reason.
6-Credit Hour Exclusion - VA automatically grants mitigating circumstances for up to 6 credits the first time a student reduces or terminates and mitigating circumstances must be considered. This automatic grant is called the 6-Credit Hour Exclusion.
In any instance of indebtedness to the VA, they recommend that students contact the Debt Management Center once they receive a debt notification from the VA. The Debt Management Center is the authoritative source of debt collection information. Veterans can reach them at 800 827-0648 or e-mail them at email@example.com.
* A non punitive grade is a grade that doesn’t count as earned credit and that doesn’t affect progress standards for graduation. A withdrawal after the drop period is non punitive if it isn’t calculated into the student’s GPA and if it doesn’t otherwise affect academic progress.
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