Citation Nr: 1302822 Decision Date: 01/25/13 Archive Date: 01/31/13 DOCKET NO. 10-27 450A ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Processing Office in Buffalo, New York THE ISSUES 1. Entitlement to educational assistance benefits under Chapter 30 (Montgomery GI Bill or MGIB) for an on-the-job training program with the Reynoldsburg Division of Police for the period from January 1, 2007 through December 28, 2007. 2. Whether an overpayment of education benefits in the amount of $3,258.51 was properly created. ATTORNEY FOR THE BOARD Hallie E. Brokowsky, Counsel INTRODUCTION The Veteran had active service from September 2001 to September 2005. This matter comes before the Board of Veterans' Appeals (BVA or Board) on appeal from of the Department of Veterans Affairs (VA) Regional Office (RO) in Buffalo, New York. The Board notes that, pursuant to his request in his substantive appeal, the Veteran was scheduled for a Board hearing in May 2011. However, the Veteran failed to report for his hearing, as scheduled. As such, the Veteran's hearing request is deemed withdrawn and the Board will proceed with its review on the present record. See 38 C.F.R. § 20.704(d), (e). FINDINGS OF FACT 1. The Veteran served on active duty from September 2001 to September 2005; his eligibility for Chapter 30 educational assistance is for a period of 10 years from his date of discharge, until September 17, 2015. 2. The Veteran was enrolled in an on-the-job training program with the Reynoldsburg Division of Police from January 1, 2007 to June 30, 2008. 3. The Reynoldsburg Division of Police's on-the-job training program was approved for payment of benefits under the Montgomery GI Bill Chapter 30 educational assistance effective December 29, 2007. 4. Chapter 30 educational assistance was granted to the Veteran for an on-the-job training program with the Reynoldsburg Division of Police for the period from December 29, 2007 to June 30, 2008. 5. The Veteran was paid a Chapter 30 educational allowance for 8 credit hours at Columbus State Community College from March 31, 2008 to June 14, 2008. 6. The Veteran was paid a Chapter 30 educational allowance for 10 credit hours at Columbus State Community College from June 30, 2008 to September 13, 2008. 7. In September 2008, the RO received a VA Form 22-1999B (Notice of Change in Student Status) from Columbus State Community College indicating that 5 credit hours for the period beginning March 31, 2008 were not part of the Veteran's degree program. 8. In October 2008, the RO received a VA Form 22-1999B (Notice of Change in Student Status) from Columbus State Community College indicating that 5 credit hours for the period beginning June 30, 2008 were not part of the Veteran's degree program. CONCLUSIONS OF LAW 1. The criteria for payment of educational assistance benefits under Chapter 30, Title 38, United States Code, for on-the-job training with the Reynoldsburg Division of Police for the period from January 1, 2007 to December 28, 2007 have not been met. 38 U.S.C.A. §§ 3001, 3011, 3013, 3014, 3034 (West 2002); 38 C.F.R. §§ 21.7042, 20.7072, 21.7110, 21.7120, 21.7122 (2012). 2. The overpayment of $3,258.51 was not properly created, and the debt against the Veteran is not valid. 38 U.S.C.A. § 5112(b)(10); 38 C.F.R. §§ 21.4135(p), 21.7135(v)(2). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veterans Claims Assistance Act of 2000 (VCAA) and implementing regulations impose obligations on VA to provide claimants with notice and assistance. 38 U.S.C.A. §§ 5102, 5103, 5103A, 5107, 5126 (West 2002 & Supp. 2012); 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a) (2012). In accordance with 38 C.F.R. § 3.159(b)(1), proper notice must inform the claimant of any information and evidence not of record (1) that is necessary to substantiate the claim; (2) that VA will seek to provide; and (3) that the claimant is expected to provide. Nonetheless, the United States Court of Appeals for Veterans Claims (Court) has held that where the law, and not the underlying facts or development of the facts are dispositive in a matter, the duty to notify and assist can have no effect on the appeal. See Manning v. Principi, 16 Vet. App. 534, 542 (2002). See also Smith v. Gober, 14 Vet. App. 227 (2002) (VCAA has no effect on appeal limited to interpretation of law); Dela Cruz v. Principi, 15 Vet. App. 143 (2001) (VCAA not applicable where law, not factual evidence, is dispositive). Indeed, this case involves benefits claimed under 38 U.S.C. Chapter 30 rather than under 38 U.S.C. Chapter 51, and as such the Board is not required to address any efforts to comply with the duties to notify and assist. Nevertheless, the Board notes that adequate notice was provided, sufficient evidence was developed in this appeal, and no further development is required. Legal Criteria Chapter 30 of Title 38, United States Code (also known as the All-Volunteer Force Educational Assistance Program) allows for veteran educational assistance if the veteran first entered active duty as a member of the Armed Forces after June 30, 1985 or was eligible for an educational assistance allowance under Chapter 34 as of December 31, 1989. 38 U.S.C.A. § 3011(a)(1) (West 2002); 38 C.F.R. § 21.7040 (2012). The veteran must also have served an obligated period of active duty. In the case of an individual with an obligated period of service of 3 years or more, the individual must have completed at least 3 years of continuous active duty. 38 U.S.C.A. § 3011(a)(1)(A)(i); 38 C.F.R. § 21.7042(a)(2). The educational assistance or supplemental educational assistance is available for a period of 10 years from the later of the date of the veteran's last discharge or the date of release from a period of active duty of 90 days or more of continuous service. 38 C.F.R. § 21.7050(a). In order to receive educational assistance, an eligible veteran must either be pursuing an approved program of education or be pursuing refresher or deficiency courses, or other prepatory or special education or training course necessary to enable the individual to pursue an approved program of education. 38 U.S.C.A. § 3014; 38 C.F.R. § 21.7110(a). VA will approve a program of education under Chapter 30, United States Code, if it (1) meets the definition of a program of education under 38 C.F.R. § 21.7020(b)(23) of this part; (2) it has an objective as described in 38 C.F.R. § 21.7020(b)(13) or 38 C.F.R. § 21.7020(b)(22) of this part; (3) the courses and subjects in the program are approved for VA training; and (4) the veteran is not already qualified for the objective of the program. 38 C.F.R. § 21.7110 (2012). A waiver of indebtedness may be authorized in a case in which collection of the debt would be against equity and good conscience. 38 U.S.C.A. § 5302(b). In essence, "equity and good conscience" means fairness to both the veteran and to the government. 38 C.F.R. § 1.965(a) (2012). Under the regulation, "equity and good conscience" involves a variety of elements: (1) fault of the debtor, (2) balancing of the faults, (3) undue hardship, (4) whether recovery would defeat the purpose of the benefit, (5) unjust enrichment, and (6) changing position to one's detriment. 38 C.F.R. § 1.965. The list of elements is not all-inclusive. See 38 C.F.R. § 1.965; see also Ridings v. Brown, 6 Vet. App. 544, 546 (1994) (holding that VA must address all relevant factors in determining whether to exercise its equitable discretion in a waiver of indebtedness claim). However, the law precludes wavier of recovery of an overpayment or waiver of collection of any indebtedness where any one of the following elements is found to exist: (1) fraud; (2) misrepresentation; or (3) bad faith. 38 U.S.C.A. § 5302(c) (West 2002); 38 C.F.R. § 1.965(b). Only one of three elements (fraud, misrepresentation, or bad faith) need be shown to preclude consideration of waiver of recovery of the indebtedness. 38 U.S.C.A. § 5302(c). VA regulations define "bad faith" as unfair or deceptive dealing by one who seeks to gain thereby at another's expense. Thus, a debtor's conduct in connection with a debt arising from participation in a VA benefits/services program exhibits bad faith if such conduct, although not undertaken with actual fraudulent intent, is undertaken with intent to seek an unfair advantage, with knowledge of the likely consequences, and results in a loss to the government. 38 C.F.R. § 1.965(b). Analysis Entitlement to Educational Assistance Benefits The Veteran seeks Chapter 30 educational assistance benefits for on-the-job police officer training with the Reynoldsburg Division of Police for the period from January 1, 2007 to December 28, 2007; the Veteran received such benefits for the period from December 29, 2007 to June 30, 2008. The record reflects that the Veteran first entered active duty after June 30, 1985, and that he completed more than 3 years of continuous active duty. Additionally, the evidence reflects that the Veteran submitted a timely application for Chapter 30 educational assistance benefits. Accordingly, the Veteran's basic eligibility for Chapter 30 educational assistance benefits is established. Similarly, the record reflects that the Veteran enrolled in apprenticeship or other on-the-job training with the Reynoldsburg Division of Police beginning on January 1, 2007 through June 30, 2008. The record also reflects that the Veteran's on-the-job training program was considered to be an approved program of education for VA purposes of 38 C.F.R. § 21.7110(a), 38 C.F.R. § 21.7020(b)(23) and (26), and under 38 C.F.R. § 21.7122(a) effective December 29, 2007. 38 U.S.C.A. §§ 3034, 3672; 38 C.F.R. §§ 21.7122(a), 21.7220. The Reynoldsburg Division of Police training program is a full-time program of apprenticeship/on-the-job training. Similarly, it is clear that the Veteran's professional or vocational objective will, upon completion, lead to an occupation, as contemplated by 38 C.F.R. § 21.7020(b)(22). The Veteran argues that he is entitled to retroactive educational assistance benefits for the period prior to December 29, 2007, as he met the requirements for educational assistance benefits at the time of his enrollment in the Reynoldsburg Division of Police on-the-job training program. However, although the Veteran met the requirements for eligibility for payments under the Chapter 30 educational assistance payments, he began his program of on-the-job training prior to approval of the program itself. As VA is bound by the operative regulations of the MGIB, the Veteran's claim must be denied. Where the law is dispositive, the claim must be denied because of the absence of legal merit or legal basis for the allowance of the appeal. See Sabonis v. Brown, 6 Vet. App. 426, 430 (1994) (stating that where the law is dispositive, the claim must be denied due to a lack of legal merit). Overpayment In this case, the Veteran enrolled at Columbus State Community College in 2008 and was provided with education benefits under the MGIB. The Veteran was enrolled for 8 credit hours for the period March 31, 2008 to June 14, 2008 and for 10 credit hours for the period June 30, 2008 to September 13, 2008. However, in September 2008 and October 2008, Columbus State Community College notified VA of a change in student status. In particular, the school indicated that, for the period March 31, 2008 through June 14, 2008, 5 of the previously approved 8 credit hours were not part of his degree program and were not considered remedial, deficiency, or prepatory in nature. And, in October 2008, the school indicated that, for the period June 30, 2008 through September 13, 2008, 5 of the previously approved 10 credit hours were not part of his degree program and were not considered remedial, deficiency, or prepatory in nature. VA subsequently adjusted the Veteran's MGIB record to remove those credits, which resulted in a $3,258.51 overpayment of benefits. A May 2009 Decision on Waiver of Indebtedness informed the Veteran that he was not entitled to a waiver of indebtedness because he was enrolled for only quarter-time training due to reduction in certified credit hours. The Veteran disagreed in July 2009, asserting that he completed all of the credit hours for which he had sought MGIB benefits (8 credit hours for the period beginning March 31, 2008 and 10 credit hours for the period beginning June 30, 2008), and that he was not informed until after such completion that such courses were not covered by the MGIB. In the July 2010 Statement of the Case, the RO conceded that Columbus State Community College's VA Certifying Official had erroneously certified for attendance course credits that were not part of his degree program and were not considered remedial, deficiency, or prepatory in nature. As such, the Board finds that the overpayment of $3,258.51 was created because the Veteran was paid benefits for credit hours that he was unaware had been erroneously certified until after completion of the courses. Under 38 U.S.C.A. § 5112(b)(10), the effective date of a reduction or discontinuance of compensation by reason of an erroneous award based solely on administrative error or error in judgment shall be the date of last payment. The Court noted that "[s]tated another way, when an overpayment has been made by reason of an erroneous award based solely on administrative error, the reduction of that award cannot be made retroactive to form an overpayment debt owed to VA from the recipient of the erroneous award." Erickson v. West, 13 Vet. App. 495, 499 (2000). Thus, the question is whether the overpayment at issue was solely due to error on the part of VA. Sole administrative error may be found to occur where the appellant neither had knowledge of nor should have been aware of the erroneous award. Such error contemplates that neither the appellant's actions nor his failure to act contributed to payment pursuant to an erroneous award. 38 U.S.C.A. § 5112 (b)(10); 38 C.F.R. §§ 21.4135(p), 21.7135(v)(2). In multiple statements, the Veteran has asserted that he was not informed that such course credits were not part of a certified course of study, and that he was not informed until after the credit hours and courses were completed that the credits were erroneously certified by Columbus State Community College's VA Certifying Official. As previously discussed, the RO conceded as much, and there is no evidence of record indicating that the Veteran had knowledge that such course credits were erroneously certified or failed to complete such course credits. Therefore, the Board finds that the overpayment was solely the result of VA administrative error. Accordingly, the overpayment at issue was not properly created, and the assessed debt of $3,258.51 is not valid and not owed by the Veteran. In effectuating a grant of this claim, the RO should determine whether the Veteran is due a refund of any portion of monies that he repaid to VA to satisfy his debt, or that VA withheld from additional benefits in an effort to satisfy the debt. ORDER Chapter 30 educational assistance benefits for an on-the-job training program with the Reynoldsburg Division of Police for the period from January 1, 2007 through December 28, 2007 is denied. The overpayment of $3, 258.51 was not properly created, and to this extent, the appeal is granted. ______________________________________________ MICHELLE L. KANE Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs