VA Identified Over $400 Million in Post-9/11 GI Bill Overpayments in Fiscal Year 2014 and Does Not Effectively Monitor These Debts

		One in Four Beneficiaries and 6,000 Schools Incurred Overpayments in Fiscal Year 2014, Caused Primarily by Veteran Enrollment Changes after VA’s Initial Payments

VA made $416 million in Post-9/11 GI Bill overpayments in fiscal year  2014, or 4 percent of the over $10 billion in benefits paid during that  period. The remaining high-dollar  overpayments were caused by school reporting errors (e.g., submitting  incorrect enrollment or tuition information) and VA processing errors (e.g.,  duplicate payments or data entry errors). VA Has $152 Million in Uncollected Overpayment Debt from Fiscal Year 2014 and an Additional $110 Million from Prior Years, Primarily Owed by Veterans

VA had $262 million in outstanding Post-9/11 GI Bill overpayment debts,  as of November 2014, primarily owed by veterans. Inadequate Guidance, Controls, and Training Have Limited VA’s Effectiveness in Reducing Overpayments from Enrollment Changes and School Errors

		VA Lacks Adequate Guidance and Controls That Could Reduce Overpayments from Enrollment Changes

Despite enrollment changes being responsible for most overpayments,  VA provides limited guidance to veterans about the possible  consequences of enrollment changes. As a result, officials at two of the schools we interviewed said that the  majority of overpayment issues arise among new student veterans who  are not aware of the consequences of enrollment changes until after they  have already incurred their first overpayment debt. By not providing guidance to schools about the benefits of using  dual-certification, VA is missing an opportunity to reduce a potentially  large number of overpayments as well as the burden placed on veterans  and schools to repay those debts. In another case file review, a  veteran’s enrollment changes were reported to VA 3 months after they  happened. VA officials said they would like to require veterans using the Post-9/11  GI Bill to verify their monthly enrollment but would need to develop a new  verification process. VA offers a variety of training opportunities for school officials, but VA  officials said the agency lacks the authority to require that school  certifying officials complete any of its training about how to correctly  process enrollment information, despite the fact that the Post-9/11 GI Bill  program is complex for schools to administer and that schools caused an  estimated $28 million in high-dollar overpayments in fiscal year 2014. VA’s Notification Methods and Overpayment Calculations Hamper Its Collection Efforts

		VA’s Notification Methods Can Leave Veterans and Schools Unaware of Their Overpayment Debts

VA relies on mailed letters to notify veterans and schools of  overpayments, which can leave some veterans and schools unaware of  their debts until VA begins collecting them. When veterans do not receive notification letters for their debts, they may  not know they have a debt, causing them to miss key deadlines. Then, if VA begins collecting the debt by offsetting other  benefits, such as monthly housing payments, veterans may be  unprepared and unable to cover their expenses, potentially creating  financial obstacles towards continuing their education, according to  officials from veteran service organizations. This process  can lead to confusion and cause delays in veterans and schools repaying  their debts in a timely manner. Since VA’s overpayment  calculation is crediting veterans for school days they did not attend, it is  inappropriately increasing the cost of the program. For example, if VA provided more information to veterans  about potential overpayment debts, veterans would better understand the  financial consequences of dropping a class or withdrawing from school  and could take steps to avoid some overpayments. Although  VA offers online training that would address these issues, school officials  are not required to take part in this minimum level of training, because VA  officials believe the agency does not have the statutory authority to  require them to do so. This can leave veterans  unaware of their debts and create financial hardships for them when VA  offsets other income sources to collect these debts. Matter for Congressional Consideration

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. Appendix I: Objectives, Scope, and Methodology

The objectives of this report were to examine: (1) what is known about the  extent of Post-9/11 GI Bill overpayments and collections, and how  effectively the Department of Veterans Affairs’ (VA) monitors them, (2) the  effectiveness of VA’s efforts to address the causes of overpayments, and  (3) how effectively VA’s policies and procedures support the collection of  overpayments. To identify the causes of overpayments, we reviewed VA’s Quarterly  High-Dollar Overpayment Reports and supporting documentation for  fiscal years 2013 and 2014 because they are VA’s only source of  generalizable data on overpayment causes.
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 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.

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.