Citation Nr: 18152312 Decision Date: 11/21/18 Archive Date: 11/21/18 DOCKET NO. 17-49 761 DATE: November 21, 2018 ORDER The overpayment of Chapter 33 education benefits in the amount of $3,313.70 is a valid debt and was properly created. Waiver of recovery of an overpayment of Chapter 33 education benefits in the amount of $3,313.70 is granted. FINDINGS OF FACT 1. The overpayment to the appellant of Chapter 33 VA education assistance in the amount of $3,313.70 was not the result of sole VA administrative error. 2. The overpayment was created because the appellant received Chapter 33 VA education benefits to which she was not entitled, based on information provided to VA by her school. 3. There is no evidence of fraud, misrepresentation, or bad faith on the appellant’s part in the creation of this debt. 4. Recovery of the overpayment by VA would be against equity and good conscience. CONCLUSIONS OF LAW 1. The overpayment of Chapter 33 education benefits was legally created, and was not based upon sole VA administrative error, such that the debt was valid. 38 U.S.C. §§ 5112, 5302 (2012); 38 C.F.R. §§ 1.911, 1.956, 1.962, 3.500, 21.9635, 21.9695, 21.9720 (2017). 2. Recovery of the overpayment by VA of Chapter 33 educational benefits would be against equity and good conscience. 38 U.S.C. §§ 5107, 5302 (2012); 38 C.F.R. §§ 1.962, 1.963, 1.965, 1.967(a), 21.128, 21.4267 (2017). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veteran served on active duty in the United States Navy from August 1990 to March 1997, with subsequent reserve service through February 2001. The appellant is his adult daughter. At the outset, the Board notes that there are multiple appeals currently before the Board concerning the Veteran’s education benefits. Specifically, in addition to this appeal concerning the appellant’s education benefits as derived from the Veteran’s service, the Veteran himself has a separate appeal concerning the calculation of his own education benefits. The Board notes that the appeals have different docket dates. For the purposes of efficiency, the Board will adjudicate all appeals over which it has jurisdiction. See Ramsey v. Nicholson, 20 Vet. App. 16, 34 (2006) (holding that 38 U.S.C. § 7107 is not an exclusive set of rules by which the Board must consider and decide cases, but rather was intended “to set broad guidelines for the general order of processing appeals at the Board to ensure fairness, efficiency, and timeliness in consideration and decision of appeals”). The Board finds that the appellant’s claim is derivative from the Veteran’s claim and, to ensure efficiency and fairness, should be decided in tandem. Therefore, the appellant’s claims are addressed herein, while the Veteran’s contentions will be addressed in a separate, but concurrently-issued, decision. Initially, to the extent that the issue of the waiver of the overpayment, as opposed to the validity of the debt, was not explicitly adjudicated below, given the Board’s favorable disposition of the waiver issue, a remand would merely delay resolution of the case with unnecessary burdens placed on VA’s adjudication system, with no benefit flowing to the appellant. A sympathetic reading of the appellant’s file clearly shows that she intended to request waiver of the debt at issue. Consequently, the Board finds that the decision below eliminates the need for a remand for adjudication of the waiver issue and is proper. See Scott v. McDonald, 789 F.3d 1375, 1381 (Fed. Cir. 2015) (noting that “[a claimant’s] interest may be better served by prompt resolution of his claims rather than by further remands to cure procedural errors that, at the end of the day, may be irrelevant to final resolution and may indeed merely delay resolution”). Analysis The Post-9/11 GI Bill was enacted by Congress in June 2008. See Pub. L. No. 110-252, Title V, §§ 5001-5003, 122 Stat. 2357 (2008). The statutory provisions are codified at Title 38 U.S.C. Chapter 33. Under the Chapter 33 provisions, an eligible individual is entitled to a maximum of 36 months of educational assistance. 38 C.F.R. §§ 21.9550, 21.9570. There is no dispute in the present case that the appellant, through the Veteran, meets the basic eligibility requirements for Chapter 33 Post-9/11 G.I. Bill educational benefits, for purposes of covering the cost associated with pursuing college courses in the Fall 2014 semester. As background, the record shows that the appellant was granted education benefits for a course of study at Tidewater Community College for a semester beginning in August 2014 and ending in December 2014. She was approved for 4 resident credit hours and 9 distance credit hours. The record shows that she completed her selected course load for the semester without failing or dropping any classes. Nearly 3 years later, during a VA compliance survey at Tidewater Community College, it was determined that 6 of the appellant’s Fall 2014 credit hours were for classes not taken in pursuit of her major. Thus, she was ineligible for the education benefits paid for those classes, and an overpayment of $3,313.70 was assessed against her. An overpayment is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled. See 38 U.S.C. § 5302; 38 C.F.R. § 1.962. An overpayment may arise from virtually any benefits program administered pursuant to VA law, including pension, compensation, dependency and indemnity compensation (DIC), educational assistance benefits and subsistence allowance, insurance benefits, burial and plot allowances, clothing allowance, and automobile or other conveyance and adaptive equipment allowances. 38 C.F.R. § 1.956 (a). VA generally is required to recover erroneous VA payments or overpayment of benefits. See Edwards v. Peake, 22 Vet. App. 57, 59 (2008); 38 U.S.C. § 5314 (a) (generally requiring VA to deduct from future benefit payments a debt arising from a person’s participation in a VA benefits program); 38 C.F.R. § 1.912a (a) (same); 38 U.S.C. § 5316 (authorizing VA to recover a benefits-related debt by bringing a suit if the person fails to appropriately respond to reasonable administrative efforts to collect the debt). That is, whenever the Secretary finds that an overpayment has been made to an appellant or eligible person, the amount of such overpayment shall constitute a liability of such appellant or eligible person to the United States. 38 U.S.C. § 3685; Mountford v. Shinseki, 24 Vet. App. 443, 450, n.6 (2011). The validity of a debt is a threshold determination that must be made prior to a decision on a request for waiver of the indebtedness. See Schaper v. Derwinski, 1 Vet. App. 430, 437 (1991); see also 38 U.S.C. § 5314 (b) (prohibiting offset of a debt from future benefit payments unless VA first makes a determination with respect to the beneficiary’s dispute of existence or amount of debt). A debtor may dispute the amount or existence of a debt, which is a right that may be exercised separately from a request for waiver or at the same time. See 38 C.F.R. § 1.911 (c)(1) (2017); see also VAOPGCPREC 6-98. The propriety and amount of the overpayment at issue are matters that are integral to a waiver determination. Schaper, supra. For a determination that an overpayment was not properly created, such that the debt was not valid, it must be established that the appellant was either legally entitled to the benefits in question or, if the appellant was not legally entitled, then it must be shown that VA was solely responsible for the appellant being erroneously paid benefits. Sole administrative error connotes that the appellant neither had knowledge of nor should have been aware of the erroneous award. Further, neither the appellant’s actions nor his or her failure to act must have contributed to payment pursuant to the erroneous award. 38 U.S.C. § 5112 (b) (9), (10); 38 C.F.R. § 3.500 (b)(2); Jordan v. Brown, 10 Vet. App. 171 (1997) (sole administrative error is not present if the payee knew, or should have known, that the payments were erroneous). Thus, a finding of sole administrative error requires not only error on the part of VA, but that the beneficiary is unaware that the payments are erroneous. Specific to VA educational assistance, an overpayment of educational assistance paid to an eligible individual under 38 U.S.C. Chapter 33 constitutes a liability of that individual, unless: (1) the overpayment was waived as provided in 38 C.F.R. §§ 1.957 and 1.962; or (2) the overpayment results from an administrative error or an error in judgment. 38 C.F.R. § 21.9695(b). The provisions of 38 C.F.R. § 21.9720(a) establish an institution of higher learning must certify an eligible individual’s enrollment before he or she may receive educational assistance. Thus, certification of enrollment is within the purview of the institution of higher learning, not VA. Here, in 2014, Tidewater Community College issued a certification of enrollment, indicating that the appellant was enrolled in classes that were appropriate for her major. Benefits were paid accordingly. Later revision of that certification resulted in an overpayment of Chapter 33 benefits by VA. The Board must find that VA was not solely responsible for the appellant being paid benefits in error. VA paid education benefits based on the certification provided by the school and, thus, there was no error on the part of VA in paying the benefits for the Fall 2014 semester. The Board finds that the debt was validly created. Nonetheless, even if the debt is deemed valid and properly created, as here, the debtor still has the right to request waiver of collection of the debt, as long as a request for waiver is timely raised and recovery of the debt would be against equity and good conscience. 38 U.S.C. § 5302; 38 C.F.R. § 1.963(a). 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 various elements, which are not intended to be all-inclusive. The elements are the fault of the debtor where such actions contribute to creation of the debt; balancing of faults where VA fault is also involved; whether collection of the debt would cause the debtor undue financial hardship by depriving him or her of basic necessities; whether collection would defeat the purpose of the VA benefit; whether failure to make restitution would result in unjust enrichment; and whether reliance on VA benefits resulted in relinquishment of a valuable right (i.e., changing position to one’s detriment). 38 C.F.R. § 1.965(a). As the evidence does not establish fraud, misrepresentation, or bad faith on the part of the appellant, the Board must determine if a waiver of recovery of the VA indebtedness is warranted on the basis of equity and good conscience under 38 U.S.C. § 5302(a); 38 C.F.R. §§ 1.963(a), 1.965(a). Concerning the first factor, the Board finds that the appellant was not at fault for creation of the debt in this case. Her school certified her Fall 2014 semester, and VA made the payment to the school for this time period based on school’s certification. As such, the fault lies with the school, not VA. As to the balancing of faults, the appellant reasonably believed that VA would compensate her for the classes she took. She has provided multiple statements to VA in which she indicated that she had relied on the advice of VA and school officials in selecting the classes necessary to complete her major. Thus, she cannot be found to be at fault for the creation of the debt. Concerning the third factor, the Board finds that the collection of the indebtedness would subject the appellant to undue economic hardship. Undue hardship is found by determining whether collection would deprive debtor or family of basic necessities. 38 C.F.R. § 1.965(a)(3). Here, a financial status report received by VA in August 2017 showed that the appellant’s monthly income exceeded her monthly expenses by less than a hundred dollars. The Board notes that the debt at issue in this appeal is not an insignificant amount of money. The appellant has also provided statements indicating that the repayment of the debt would result in financial hardship, including a threat to her continued housing. Clearly, recovery of the debt would subject the appellant to undue economic hardship. The Board must also consider whether the recovery of the overpayment would defeat the purpose for which the benefits were intended. The purpose of VA education benefits is to help eligible students complete a program of education by providing financial assistance. Here, the record reflects that the appellant pursued advanced education and VA benefits were used to effectuate this. Although she was erroneously paid more than she was entitled to, these education benefits were used for their intended purpose. Regarding the fifth factor, the facts show the appellant was unjustly enriched by the improper payment of VA benefits, but the unjustness of this enrichment is significantly diminished by her lack of fault in the creation of the debt, as well as the financial hardship its recoupment would cause. The final factor that the Board is explicitly required to consider is whether reliance on the benefits resulted in relinquishment of a valuable right or the incurrence of a legal obligation. The appellant has not contended with any specificity, nor does the evidence show, that she had relinquished a valuable right or incurred a legal obligation in reliance on VA educational assistance benefits. Therefore, the Board concludes that considerations of equity and good conscience as they pertain to the specific facts of this case dictate a need for reasonableness and moderation in the exercise of the Government’s rights. In view of the Board’s findings, and affording reasonable doubt in favor of the appellant, the recovery of the overpayment in the amount of $3,310.70 would cause undue hardship on the appellant and would be against equity and good conscience. Accordingly, the appellant’s request for waiver is granted. See 38 U.S.C. § 5107; 38 C.F.R. § 3.102. MICHELLE L. KANE Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD Jeremy J. Olsen, Counsel