The Department of Veterans Affairs is overpaying hundreds of millions of dollars to schools and veterans under the post-9/11 GI Bill when students drop a class or leave school, letting $416 million go uncollected in fiscal 2014 alone, a newly released report says.
The program works like this: When a veteran enrolls, the government sends money for tuition and fees to the school and begins sending housing and living stipends to the veteran. If a student drops or fails to complete a class, the VA is supposed to scale back the benefits accordingly. The student becomes responsible for any overpayments.
These debts often come as a surprise to students because the VA, which administers the massive education program for service members and veterans who served after the terror attacks of Sept. 11, 2001, has not been clear about the rules, the Government Accountability Office found.
“Because VA is not effectively communicating its program policies to veterans, some veterans may be incurring debts that they could have otherwise avoided,” auditors wrote.
One in every four students getting GI Bill benefits — about 225,000 veterans — incurred a debt to the government that averaged about $570, the GAO said. And more than 7,000 veterans owed more than $5,000 to the government after they withdrew from school or continued to get housing benefits when they shouldn’t have.
In most cases, veterans are responsible for repaying the debt resulting from government overpayments, with schools responsible in a small number of cases.
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.
“Unless VA expands its monitoring of overpayment debts and collections, it will not be able to ensure that it is taking appropriate steps to safeguard taxpayer funds,” said the report, requested by Sen. Tom Carper (Del.), the top Democrat on the Senate’s government oversight panel.
The wasted money is one piece of what the government calls accidental “improper payments,” 90 percent of which are overpayments by federal agencies, from Social Security checks to Medicare reimbursements to doctors.
In a related report early this month, the GAO found that these payments expanded in fiscal 2014 after declining for several years, reaching $124.8 billion or just over 3 cents of every dollar spent by the government. The money has totaled $1 trillion since fiscal 2003.
Three-quarters of the improper payments come from three programs — Medicare, Medicaid and the Earned Income Tax Credit — all of which are meant to help the elderly and the poor. Close to 10 percent of Medicare’s $603 billion in outlays were improperly paid, and the error rate for the $65 billion earned income credit was 27 percent.
The same year, the VA provided $10.8 billion in GI Bill education benefits to almost 800,000 veterans and others.
Auditors found that these debts are magnified by a paper-based system of notifying students they owe money and by porous oversight of the program. Addresses in the agency’s files often are out of date, so some students don’t even receive notifications that they owe money and miss deadlines for disputing them.
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.
The VA has taken steps to address processing errors through technology improvements, quality assurance reviews, and training, the report noted. But it recommended that VA find better ways to communicate its policies to individual veterans, notify them more promptly when an overpayment occurs and improve its system for verifying enrollment.
VA officials said they will pursue those changes,including expanding their monitoring of overpayments and collections, providing more information to veterans upfront and developing a system for verifying veterans’ monthly enrollment.
The agency noted in a response to auditors that school officials have spotty attendance at training VA offers in administering the GI Bill; the VA said it can’t force schools to participate.