Citation Nr: 1121683 Decision Date: 06/03/11 Archive Date: 06/09/11 DOCKET NO. 10-36 529 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in St. Louis, Missouri THE ISSUE Entitlement to a waiver of recovery of an overpayment of educational assistance payments in the amount of $719.53. ATTORNEY FOR THE BOARD R. Kessel, Counsel INTRODUCTION The Veteran had active military service from May 1993 to October 2003. He also had an unverified period of active duty from November 2005 to November 2006 and other service in a Reserve component. This matter comes before the Board of Veterans' Appeals (Board) on appeal from an October 2009 decision of Department of Veterans Affairs (VA) Committee on Waivers and Compromises (Committee) at the Regional Office (RO) in St. Louis, Missouri. FINDINGS OF FACT 1. The Veteran submitted his request for a waiver of recovery of an overpayment of educational assistance payments in the amount of $719.53 within 180 days following the date of notice of indebtedness. 2. In regards to the first period of educational assistance in question (April 25, 2005, to June 17, 2005), the Veteran had no fault in the creation of the debt and collection would result in undue hardship. 3. In regards to the second period of educational assistance in question (June 27, 2005, to August 19, 2005), the Veteran had little fault in the creation of the debt and collection would result in undue hardship. CONCLUSION OF LAW Recovery of the debt in the amount of $719.53 would be against equity and good conscience. 38 U.S.C.A. § 5302 (West 2002); 38 C.F.R. §§ 1.962, 1.963, 1.965 (2010). REASONS AND BASES FOR FINDINGS AND CONCLUSION Recovery of an overpayment may be waived if there is no indication of fraud, misrepresentation, or bad faith, on the part of the person or the persons having an interest in obtaining the waiver, and recovery of such indebtedness would be against equity and good conscience. See 38 U.S.C.A. § 5302(c) (West 2002); 38 C.F.R. §§ 1.962, 1.963 (2010). In the absence of fraud, misrepresentation, or bad faith, consideration may be given as to whether recovery of the overpayment would be against equity and good conscience. The standard "equity and good conscience" will be applied when the facts and circumstances in a particular case indicate a need for reasonableness and moderation in the exercise of the Government's rights. The decision reached should not be unduly favorable or adverse to either side. The phrase "equity and good conscience" means arriving at a fair decision between the obligor and the Government. In making this determination, consideration will be given to the following elements, which are not intended to be all-inclusive: (1) the fault of the debtor; (2) balancing of faults between the debtor and VA (3) undue hardship of collection on the debtor; (4) whether collection would defeat the purpose of an existing benefit to the veteran; (5) whether failure to collect a debt would result in the unjust enrichment of the veteran; and (6) whether the veteran changed positions to his detriment in reliance upon a granted VA benefit. See 38 U.S.C.A. § 5302; 38 C.F.R. § 1.965(a) (2010); Ridings v. Brown, 6 Vet. App. 544, 546 (1994). For a notice of indebtedness issued on or after April 1, 1983, a request for waiver of the indebtedness shall only be considered if made within 180 days following the date of notice. The 180-day period may be extended if the individual requesting waiver demonstrates to the Chairperson of the Committee that, as a result of an error by either VA or the postal authorities, or due to other circumstances beyond the debtor's control, there was a delay in such individual's receipt of the notification of indebtedness beyond the time customarily required for mailing, including forwarding. If the requester does substantiate that there was such a delay in the receipt of the notice of indebtedness, the Chairperson shall direct that the 180-day period be computed from the date of the requester's actual receipt of the notice of indebtedness. See 38 U.S.C.A. § 5302; 38 C.F.R. § 1.963(b). By way of background, in November 2004, the Veteran applied for VA educational assistance under Chapter 30, Title 38, United States Code, commonly referred to as the Montgomery GI Bill (MGIB). In April 2005, he was awarded MGIB benefits and began to utilize the educational assistance at the Fort Riley, Kansas branch of Central Texas College (CTC). In September 2008, VA conducted a compliance survey that revealed several discrepancies involving changes in the number of credit hours undertaken by the Veteran at CTC. During the period of April 25, 2005, to June 17, 2005, the number of credit hours was incorrectly reported as 6 credit hours but should have been 3 credit hours. During the period of June 27, 2005, to August 19, 2005, the Veteran was certified for 6 credit hours. He withdrew from 3 credit hours effective June 27, 2008, and received a non-punitive grade ("W"). The Veteran completed the remaining 3 credit hours. The change was never reported by the certifying official. During the period of August 29, 2005, to October 21, 2005, the Veteran was certified for 6 credit hours. He withdrew from all 6 credit hours effective on the last day of class and received non-punitive grades ("W"). The Veteran's withdraw was due to a military deployment but the certifying official never reported the change. Later in September 2008, the Veteran was notified of these discrepancies. He was informed that there was no change in his pay benefits for the third period (August 29, 2005, to October 21, 2005) because VA was able to verify the Veteran's call up for deployment. However, due to the discrepancies in the first two periods, the Veteran was told that there had been an overpayment and that a debt of $719.53 was created. He was also told that another letter would be sent to him with more details about the debt. The Veteran did not challenge the validity or amount of the debt. However, he subsequently requested a waiver of the debt of $719.53 that was created due to the overpayment. The initial threshold aspect of the appeal is whether the Veteran timely submitted the waiver request. In denying the request, the Committee determined that the Veteran's waiver request was untimely because it was not filed within the 180-day period following notice of the indebtedness. It was determined that the Veteran submitted a waiver request on October 8, 2009-over 1 year after the September 2008 notification letter regarding the debt creation. If this were the case, the waiver request would be considered untimely as outside the 180-day period and the appeal would be denied. The Board notes that the education folder presently before the Board lacks some information. The follow-up letter regarding details of the debt described in the September 2008 letter has not been included. Additionally, there is no accounting of how the amount of $719.53 was calculated. Moreover, the October 2009 waiver request and subsequent denial by the Committee dated later in October 2009 are also not in the education folder. Nevertheless, of record is a copy of a letter from the Veteran dated January 21, 2009. The subject of the letter is "Request for waiver of debt." In the letter, the Veteran clearly requests a waiver of the debt in question. A date stamp on the letter indicates that it was received in the education division of the St. Louis RO on January 21, 2009. This information shows that the Veteran did indeed submit the waiver request within the 180-day period following notification of the debt. Even if he resubmitted a request later in October 2009, this initial request already met the timeliness requirement. Accordingly, the waiver request must not be denied on account of the timeliness of the request. See 38 U.S.C.A. § 5302; 38 C.F.R. § 1.963(b). Because the waiver request was timely and because there is no indication of fraud, misrepresentation, or bad faith on the part of the Veteran, the Board shall next consider whether recovery of the overpayment would be against equity and good conscience. See 38 U.S.C.A. § 5302(c); 38 C.F.R. §§ 1.962, 1.963. In regards to the first period in question (April 25, 2005, to June 17, 2005), it appears that the Veteran was paid educational benefits for 3 credit hours that he did not complete or for which he even applied. The education folder includes an electronic enrollment certification from CTC, dated April 11, 2005. CTC's certifying official certified that the Veteran was taking 6 credit hours during this period. The September 2008 compliance survey indicates that the credit hours were incorrectly reported as 6 credit hours instead of 3 credit hours. In considering the "equity and good conscience" elements, the Veteran was unjustly enriched by the payment for 6 credit hours instead of 3 credit hours. However, this occurred through no fault of the Veteran. The fault lies with VA and CTC's certifying official who reported the credit hours in error. It would be difficult for the Veteran to realize such an error was made. Only through meticulous record keeping of payments received and a more than rudimentary knowledge of the amounts to which he was entitled would he be able to uncover such a reporting error. In fact, VA and CTC did not uncover the error until over 3 years later. Additionally, in November 2009, the Veteran has indicated that this debt created a financial burden on his family and he is now facing collections. Therefore, when considering the relevant elements, particularly that the debt as to the first period was not the fault of the Veteran and that there would be an undue hardship of collection on the Veteran, the Board finds that recovery of the overpayment would be against equity and good conscience even if the Veteran was unjustly enriched. See 38 U.S.C.A. § 5302; 38 C.F.R. § 1.965(a). With respect to the second period in question (June 27, 2005, to August 19, 2005), it appears that the Veteran was paid educational benefits for 3 credit hours that he did not complete and that he was issued a non-punitive "W" grade for withdrawing from the class. In considering the "equity and good conscience" elements, the Veteran was unjustly enriched by the payment for 3 credit hours for a class from which he ultimately withdrew. However, this occurred through little fault of the Veteran. He produced official orders from the Department of the Army dated August 8, 2005. The Veteran was ordered to report to annual training in Joplin, Missouri, on August 11, 2005-prior to the end of the class. Those orders preceded orders dated August 26, 2005 that mobilized his unit for Operation Iraqi Freedom and deployment to Southwest Asia. The Veteran stated he was unable to complete the course during the training in Joplin because there was a lack of internet access and a certified testing facility. Given that the Veteran was attending the class in question and needed to withdraw on account of orders for annual training preceding a unit call up, he had little control over the situation. Notably, he did complete another course during the second time period; thus, it appears that he was attempting to complete the credit hours for which he was receiving assistance. Additionally, a greater amount of fault lies with VA and CTC as the certifying official never reported the change in credit hours. In fact, VA and CTC did not uncover the error until over 3 years later. Additionally, the circumstances are not much different than those of the third period of discrepancies (i.e., unit call up for active duty) for which an overpayment was not considered by the RO. Furthermore, as noted previously, the Veteran has indicated that this debt created a financial burden on his family and he is now facing collections. Therefore, when considering the relevant elements, particularly that the debt as to the second period was of little fault of the Veteran and that there would be an undue hardship of collection on the Veteran, the Board finds that recovery of the overpayment would be against equity and good conscience even if the Veteran was unjustly enriched. See 38 U.S.C.A. § 5302; 38 C.F.R. § 1.965(a). In sum, consideration of equity and good conscience as to the facts and circumstances in the Veteran's case indicates a need for reasonableness and moderation in the exercise of the Government's rights. In view of the Board's findings, recovery of the debt in the amount of $719.53 would be against equity and good conscience. Accordingly, the Veteran's timely request for a waiver should be granted. (CONTINUED ON NEXT PAGE) ORDER Waiver of recovery of the debt in the amount of $719.53 is granted. ____________________________________________ MARK F. HALSEY Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs