Citation Nr: 18147783 Decision Date: 11/06/18 Archive Date: 11/06/18 DOCKET NO. 15-10 352A DATE: November 6, 2018 ORDER Waiver of recovery of an overpayment of Veterans Retraining Assistance Program (VRAP) benefits in the amount of $4,234.40 is denied. FINDINGS OF FACT 1. Evidence received from Asheville-Buncombe Technical Community College notified VA that the Veteran reduced his credit hours from 12 to 9, effective September 13, 2013; he was no longer considered a full-time student as of that date. 2. In December 2013, VA terminated the Veteran’s VRAP benefits, effective September 13, 2013, which action resulted in an overpayment in the amount of $4,234.40. 3. The Veteran’s continued acceptance of VRAP education benefits and verification of attendance after September 13, 2013, constituted a material misrepresentation of fact, as he was not attending school on a full-time basis and acknowledged that he believed VRAP benefits were received in error. CONCLUSIONS OF LAW 1. An overpayment of VRAP benefits in the amount of $4,234.40 was properly created. 38 U.S.C. §§ 3680, 5107 (2012); Pub. L. No. 112-56, 125 Stat. 711 (Nov. 21, 2011); 38 C.F.R. §§ 3.102, 21.4135, 21.4136 (2017). 2. The criteria for waiver of recovery of the overpayment of VRAP benefits in the amount of $4,234.40 are not met. 38 U.S.C. § 5302 (2012); 38 C.F.R. §§ 1.962, 1.963, 1.965 (2017); October 2014 Notice of Disagreement. REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veteran served on active duty from December 1982 to December 1986. This appeal to the Board of Veterans’ Appeals (Board) arose from a December 2013 decision of a Department of Veterans Affairs (VA) Regional Office (RO). Although the RO lists the issue on appeal as a “denial of education benefits based on reduction below full time” in the February 2015 Statement of the Case, the evidence indicates that the issue before the Board is whether the Veteran is entitled to waiver of recovery of an overpayment of VRAP benefits in the amount of $4,234.40, to include consideration of the validity of the debt. By way of background, the December 2013 decision on appeal stopped the Veteran’s benefits under the VRAP program as of September 13, 2013, due to a change in the Veteran’s enrollment status. In a subsequent decision, VA denied the Veteran’s request to waive recovery of an overpayment of VRAP benefits in the amount of $4,234.40 because the request for waiver was not submitted within 180 days of VA’s debt notice. See November 2014 Decision on Waiver of Indebtedness. The Board notes, however, that subsequent correspondence from VA addresses the merits of the Veteran’s appeal, and thus, the Board will address the merits as well. See, e.g., February 2015 Statement of the Case. 1. Whether a debt in the amount of $4,234.40 for payment of VRAP benefits was properly created. By way of background, the VRAP was a component of the VOW to Hire Heroes Act of 2011, passed by Congress, and signed into law by the President on November 21, 2011. See Pub. L. No. 112-56, § 211, 125 Stat. 712 -715 (2011). The VRAP directed VA, in cooperation with the Department of Labor (DOL), to pay for up to 12 months of a retraining assistance in a “high demand” occupation for unemployed eligible veterans between the ages of 35 and 60 as determined by DOL and VA. The VRAP ended on March 31, 2014. Participants in the VRAP must have attended a program of education on a full-time basis in order to receive up to 12 months of assistance equal to the monthly full-time payment rate under the Montgomery GI Bill-Active Duty program ($1,564 effective October 1, 2012, and $1,648 effective October 1, 2013). Notably, participants did not receive benefits for any period during which the training dropped below full-time status. In this regard, “full-time” enrollment in a professional accredited and equivalent program involving standard collegiate courses, including cooperative and external degree programs, is 14 semester hours or equivalent. See 38 C.F.R. §§ 21.4270(c), 21.4272(a) (2017). Nonetheless, when the institution certifies that all undergraduate students enrolled for a minimum of 12 or 13 semester hours or the equivalent are charged full-time tuition, or considered full time for other administrative purposes, such minimum hours will establish the criteria for full-time measurement and such minimum hours will be considered full-time. 38 C.F.R. § 21.4270(c), Note 2. Further, participants must have been enrolled in a VA-approved program of education offered by a community college or technical school, which program must have led to an Associate Degree, Non-College Degree, or a Certificate, and trained the Veteran for a high-demand occupation. Here, in September 2013, the Veteran was informed that he was approved for monthly VRAP benefits in the amount of $1,564.00 for the period beginning on August 19, 2013, and ending September 30, 2013, and in the amount of $1,648.00 for the period beginning on October 1, 2013, and ending December 14, 2013. See September 2013 VA Award Letter. He was also informed that he would have 8 days of benefits remaining as of September 30, 2013; he would not receive a full month of benefits if he was not enrolled for the entire month; VRAP benefits can only be paid for full-time enrollment; and VA would not pay for courses he did not attend, courses from which he withdrew, and courses completed but for which he received a grade that would not count toward graduation. Id. He was advised to promptly notify his school’s veterans certifying official and VA is there was any change in his enrollment and informed that he is responsible for all debts resulting from changes in enrollment. Id. In December 2013, the Veteran’s school reported that the Veteran reduced his credit hours from 12 credits to 9 credits, effective September 13, 2013. Based on that information, VA terminated the Veteran’s VRAP benefits, effective September 13, 2013, the date on which it was reported the Veteran’s enrollment and attendance was reduced to less than full time. See December 2013 VA correspondence. The Veteran was informed that the termination of his VRAP benefits created an overpayment in the amount of $4,234.40 for the period from September 13, 2013, to November 30, 2013. See id. In his October 2014 Notice of Disagreement, the Veteran reported that VA informed him in September 2013 that he would have 8 days of VRAP benefits remaining as of September 30, 2013, and as a result, he dropped a non-program course to find employment to supplement his living expenses, which reduced his course load to 9 credits. He also reported that, when he continued to receive benefits, he assumed a mistake had been made and that he remained eligible for the payments. See October 2014 Notice of Disagreement. According to the Veteran, he realized that dropping the non-essential course would lead to a reduction in his benefits and a creation of a debt to VA when he received VA’s December 2013 decision that his benefits were stopped on September 13, 2013. Id. As indicated above, applicable regulations provide that VA will not pay education benefits for a course from which the veteran withdraws, unless the veteran withdraws because he or she is ordered to active duty; or mitigating circumstances are demonstrated. See 38 C.F.R. §§ 21.4135, 21.4136 (2017). Overall, because payment of VRAP benefits requires full-time enrollment, the Veteran’s VRAP benefits were properly terminated when his credit hours dropped from 12 to 9. Thus, the Board finds that the debt was properly created. 2. Entitlement to waiver of recovery of an overpayment of VRAP benefits in the amount of $4,234.40. Having determined that the debt was validly created, the Board turns to the question of whether the Veteran may be entitled to a waiver of recovery of the overpayment. The law provides that 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 and recovery of such indebtedness would be against equity and good conscience. See 38 U.S.C. § 5302(c) (2012); 38 C.F.R. §§ 1.962, 1.963 (2017). However, waiver of recovery of an overpayment or waiver of collection of any indebtedness is precluded by law where any one of the following elements is found to exist: (1) fraud; (2) misrepresentation of a material fact; (3) bad faith. 38 U.S.C. § 5302(c); 38 C.F.R. § 1.965(b) (2017). Only one of the three elements (fraud, misrepresentation, or bad faith) need be shown to preclude consideration of waiver of recovery of the indebtedness. In other words, any indication that a claimant committed fraud, misrepresentation of a material fact, or bad faith in connection with his receipt of VA benefits precludes the Board from granting a waiver of recovery of the overpayment. 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. Richards v. Brown, 9 Vet. App. 255 (1996); 38 C.F.R. § 1.965(b). To receive payment of VRAP benefits, it is required that the recipient of those benefits verify his/her school attendance each month, either electronically or via telephone call. See September 2013 Award Letter. As acknowledge previously, the Veteran was advised that VA would not pay for courses he did not attend, courses from which he withdrew, and courses completed but for which he received a grade that would not count towards graduation. Id. The Veteran was also informed that he should promptly notify the school veterans certifying official and VA if there was any change in his enrollment and that VRAP benefits could only be paid for full-time enrollment. Id. Notwithstanding the Veteran’s report that he began this process in good faith, the Board notes that he also reported in his October 2014 Notice of Disagreement that he assumed a mistake had been made regarding the continued disbursement of education benefits after he assumed they would have expired, but he continued to accept the benefits. Additionally, the Veteran would not have continued to receive VRAP benefits after September 13, 2013, if he had not also continued to verify his school attendance on a monthly basis. The Board thus concludes that the Veteran misrepresented a material fact, as he was not attending school on a full-time basis, and waiver of recovery of the debt is precluded by law. See 38 U.S.C. § 5302(c); 38 C.F.R. §§ 1.962, 1.965. Hence, the principles of equity and good conscience, such as any current financial hardship, are not applicable. Waiver of recovery of overpayment is denied. STEVEN D. REISS Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD M. C. Wilson, Counsel