Veteran Students Who Drop Out May Owe Repayment

By Debbie Gregory.

Veteran students who attend school on the GI Bill may be facing monetary consequences if they fail to complete classes.

The Department of Veterans Affairs is trying to recoup more than $200 million that was overpaid when veterans dropped classes or failed to complete them, thus becoming ineligible for the tuition and living stipends.

And this information comes as a complete surprise to many of these students.

When a veteran enrolls in school, the government sends money for tuition and fees to the school, and sends housing and living stipends to the veteran. In theory, if the student drops or fails to complete a class, the VA scales back the benefits accordingly, and the student becomes responsible for any overpayments

In 2014, about one in every four GI Bill beneficiaries, or about 225,000 veterans, incurred an overpayment debt, averaging about $570. And in most cases, the veteran students are responsible for repaying the debt. The VA does not require veterans to verify their enrollment each month, causing a “significant time lapse” between when veterans drop courses and when the government learns about the enrollment change and can reassess payments.

VA officials have recouped more than half of the overpayments from fiscal 2014, but another $110 million from previous years is still uncollected, most of it from veterans.

While the VA has taken steps to address processing errors through technology improvements, quality assurance reviews, and training, the VA still needs to find better ways to communicate its policies to individual veterans. If more veterans are made aware of how the system works, chances are they would be more aware of how to avoid the pitfall. And when they do have the issue, the VA should notify them more promptly when an overpayment occurs, and also improve its system for verifying enrollment.

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