Citation Nr: 1824608	
Decision Date: 04/23/18    Archive Date: 05/03/18

DOCKET NO.  14-38 823	)	DATE
	)
	)

On appeal from the
Department of Veterans Affairs Regional Office in Seattle, Washington


THE ISSUES

1.  Whether an overpayment of Chapter 33 (Post-9/11 GI Bill) VA education benefits in the amount of $557 was properly created (i.e., the validity of the debt).

2.  Entitlement to a waiver of recovery of overpayment of Chapter 33 (Post-9/11 GI Bill) VA education benefits in the amount of $557.


WITNESS AT HEARING ON APPEAL

The Veteran


ATTORNEY FOR THE BOARD

P.S. Rubin, Counsel



INTRODUCTION

The Veteran served on active duty in the United States Army from February 2010 to June 2010 and from September 2016 to August 2017.  She also served in the U.S. Army Reserve.  

This matter comes before the Board of Veterans' Appeals (Board) on appeal from a
May 2014 decision issued by the Committee on Waivers and Compromises (Committee) of the Department of Veterans Affairs (VA) Regional Office (RO) in Muskogee, Oklahoma.  However, jurisdiction of the case was transferred to the RO in Seattle, Washington, which is closer to the Veteran's current domicile.  That office forwarded the Veteran's appeal to the Board.  

In August 2015, the Veteran presented testimony at a Board videoconference hearing before the undersigned Veterans Law Judge.  A transcript of that hearing is associated with the claims file.  


FINDINGS OF FACT

1.  The overpayment to the Veteran of Chapter 33 (Post-9/11 GI Bill) VA education assistance in the amount of $557 was not the result of sole VA administrative error.  By law, the school issues the certification of enrollment for courses.    

2.  The overpayment was created because the Veteran received Chapter 33 VA education benefits in the total amount of $557, to which she was not entitled according to the certification of enrollment.    

3.  There is no evidence of fraud, misrepresentation, or bad faith on the Veteran's part in the creation of this debt.  

4.  Regardless, recovery of the overpayment by VA would be against equity and good conscience.  Recovery of the overpayment by VA of Chapter 33 benefits would defeat the purpose for which the benefits were intended, thus outweighing any unjust gain by the Veteran. 


CONCLUSIONS OF LAW

1.  The overpayment of Chapter 33 (Post-9/11 GI Bill) education benefits in the total amount of $557 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, in the amount of $557, is 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

I.  VA's Duty to Notify and Assist

The Veterans Claims Assistance Act of 2000 (VCAA), in part, describes VA's duties to notify and assist claimants in substantiating a claim for VA benefits.  38 U.S.C. §§ 5100, 5102, 5103, 5103A, 5106, 5107, 5126 (2012); Honoring America's Veterans and Caring for Camp Lejeune Families Act of 2012, Pub. L. No. 112-154, §§ 504, 505, 126 Stat. 1165, 1191-93; 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a) (2017).  

However, the U. S. Court of Appeals for Veterans Claims (Court) has held that the VCAA is not applicable to claims for waiver of recovery of overpayment, such as the case here.  Reyes v. Nicholson, 21 Vet. App. 370, 379-380 (2007); Barger v. Principi, 16 Vet. App. 132, 138 (2002).  See also Lueras v. Principi, 18 Vet. App. 435 (2004) (the VCAA does not apply to a waiver).  

In any event, given the favorable outcome of the appeal for waiver of overpayment, which is a full grant of benefits sought, the appeal has been substantiated, obviating the need for further discussion of how VA fulfilled the duties to notify and assist with respect to this appeal.  See Bernard v. Brown, 4 Vet. App. 384, 394 (1993).

II.  Law and Analysis

The post-9/11 GI Bill, 38 U.S.C. Chapter 33, provides for VA educational assistance for members of the Armed Forces based on active duty service after September 10, 2001.  38 U.S.C. § 3311; 38 C.F.R. § 21.9520.  It was enacted by Congress in June 2008.  See Pub. L. No. 110-252, Title V, §§ 5001-5003, 122 Stat. 2357 (2008).  The statutory provisions of the post-9/11 GI Bill are codified at Title 38 U.S.C. Chapter 33.  VA promulgated new regulations to implement the change in law in March 2009 and the regulations are currently codified at 38 C.F.R. §§ 21.9500 - 21.9770 (2017).  

Payments of educational assistance (including Chapter 33 benefits) are based on pursuit of an approved program of education.  38 C.F.R. § 21.9590(a).  "Program of education" means a curriculum or combination of courses pursued at an institution of higher learning that are accepted as necessary to meet the requirements for a predetermined and identified educational, professional, or vocational objective.  The curriculum or combination of courses pursued must be listed in the institution of higher learning's catalog and included in the approval notice provided by the State approving agency to VA.  38 U.S.C. §§ 3034, 3301, 3323, 3452; 38 C.F.R. § 21.9505.  "Institution of higher learning" means a college, university, or similar institution, including a technical or business school, offering postsecondary level academic instruction that leads to an associate or higher degree if the school is empowered by the appropriate State education authority under State law to grant an associate or higher degree.  38 C.F.R. § 21.9505.

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.  

In the present case, there is no dispute that the Veteran meets the basic eligibility requirements for Chapter 33 "Post-9/11 GI Bill" educational benefits.  See 38 C.F.R. § 21.9520.  That is, the Veteran is eligible for Chapter 33 benefits based on her earlier period of active service in the Army from February 2010 to June 2010, with an honorable discharge.  38 U.S.C. § 3311; 38 C.F.R. § 21.9520(a)(2).

With regard to the background facts, in a September 2011 decision, VA approved Chapter 33 educational benefits for the Veteran for courses to be taken at the North Seattle Community College, Seattle University, and Keller / DeVry Graduate School of Management.  The end goal of the Veteran's application for Chapter 33 benefits was to secure a Post Baccalaureate Certificate in Accounting.  She then would proceed to take the certified public accountant (CPA) examination.  The three schools above approved certifications of enrollment for the Veteran from 2011 to 2013.  The Veteran took various accounting courses at these institutions from 2011 to 2013.  The VA approved her Chapter 33 benefits at the 40 percent rate of benefits payable.  Thus, VA paid this percentage of the Veteran's tuition, fees, books, and supplies in the pursuit of her accounting degree from 2011 to 2013.  

Originally, during the Veteran's final term of classes, DeVry University submitted to VA a certification of enrollment under Chapter 33 for education benefits through December 28, 2013.  However, DeVry University then issued a new certification of enrollment, shortening the Veterans' final school term by 7 days by moving the end-date from December 28, 2013 to December 21, 2013.  The school certifying official (SCO) at DeVry University reasoned that it could not certify the Veteran's period of "self-study" or "independent study" for the 7 day period from December 21, 2013 to December 28, 2013.  The SCO at DeVry University explained that they do not certify for self-study because the school has no way of telling what the student is doing during that time.  In short, the campus courses are followed by a self-study section which is not certified.  The school can only certify dates the Veteran was required to attend classes.  So the school retroactively decided it would not certify the self-study dates, resulting in an overpayment of Chapter 33 benefits by VA.  VA officials confirmed the Veteran's course dates with the SCO at DeVry.  The SCO told VA self-study dates cannot be certified.  See January 2014 emails between DeVry University and VA personnel; July 2014 emails between VA officials.    

In light of the above, VA determined that it had overpaid Chapter 33 benefits in the amount of $557 for the 7-day time period from December 21, 2013 to December 28, 2013.  In a February 2014 Debt Management Center (DMC) letter, the Veteran was notified of the amount of the overpayment ($557) created by the excess of Chapter 33 benefits improperly paid to her.  The DMC letter advised she could dispute the validity of the debt or request a waiver of the debt. 

The Veteran has not challenged the amount of the debt - $557.  Nonetheless, the Veteran has challenged the validity of the debt.  She believes it was improperly created.  VA certifying officials incorrectly classified the last week of her courses as "independent study."  See March 2014 waiver request.  The Veteran has stated that since the self-study period of time was an actual requirement for the accounting course in the school's syllabus, the 7-day self-study period should be certified by the school, just like the in-person classes.  That is, the course syllabus required self-study work or else the Veteran would receive an unsatisfactory grade.  The self-study is "distance learning" which should be covered by Chapter 33 benefits.  The Veteran had to access live instructors during her 7-day period of self-study.  She cites a VA website pamphlet as defining "distance learning" as any courses requiring interaction using communications technology.  Thus, the school has certified incorrectly and shortchanged her by a week.  VA should compensate her for this week of self-study.  No legal debt was actually established.  It was not fair for the school to decertify her for her 7-day period of self-study, because conversely, the syllabus itself required the self-study.  She adds that the self-study period was intensive for her.  In short, she asserts the debt was not properly created.  It was unjust for the school to decide to make the decertification of enrollment adjustment without notifying her or explaining why they shortened the duration of her final term in 2013 by 7 days.  See January 2014 emails between DeVry University and VA personnel; July 2014 emails between VA officials; October 2014 VA Form 9; August 2015 videoconference hearing testimony.        

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 a veteran or eligible person, the amount of such overpayment shall constitute a liability of such veteran or eligible person to the United States.  38 U.S.C. § 3685; Mountford v. Shinseki, 24 Vet. App. 443, 450, n.6 (2011). 

The preliminary issue of 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).  In other words, before deciding a request for waiver, VA must first consider the validity of the debt.  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.  See Schaper, 1 Vet. App. at 434.  

For a determination that the 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.  Administrative errors include all administrative decisions of entitlement, whether based upon mistake of fact, misunderstanding of controlling regulations or instructions, or misapplication of law.  VAOPGPREC 2-90 (July 17, 1989), 55 Fed. Reg. 27757 (1990).  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) (cross-referencing 38 C.F.R. § 21.9635(r)).

When an administrative error or error in judgment by VA is the sole cause of an erroneous award, the award will be reduced or terminated effective the date of last payment.  38 C.F.R. § 21.9635(r).  But if fault for an overpayment cannot "clearly be ascribed to the beneficiary," VA's policy is to assume that fault and not create a debt against the beneficiary.  Dent v. McDonald, 27 Vet. App. 362, 380 (2015) (citing VAOPGCPREC 2-90 (March 1990)).  However, when both VA and the beneficiary are partially at fault, the debt based on the effective date of reduction or discontinuance of benefits is properly created.  See Jordan v. Brown, 10 Vet. App. 171, 174 (1997).

The term "erroneous award" includes erroneous payments made subsequent to the initial award of benefits.  Dent, 27 Vet. App. at 374. 

The Board notes that a request for waiver of indebtedness must be made within 180 days following the date of notice of the indebtedness issue by VA to the debtor.  38 U.S.C. § 5302(a); 38 C.F.R. § 1.963(b)(2).  That is, under the applicable statute, 38 U.S.C. § 5302(a), the application for waiver should be made within 180 days from the date of notification of indebtedness by the Secretary to the payee, or within such longer period as the Secretary determines is reasonable in a case in which the payee demonstrates to the satisfaction of the Secretary that such notification was not actually received by such payee within a reasonable period after such date.  In the present case, the Veteran's request for waiver of the debt was filed in a timely manner in March 2014, well within 180 days of the February 2014 DMC notice letter from VA.  

Therefore, in the present case, VA must determine whether the Chapter 33 educational benefits debt of $557 is valid and not due to sole administrative error by VA.  The Veteran has not disputed the amount itself, but rather the validity or creation of this debt.  Turning to this question, 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.  That is, certification of enrollment is in the hands of the institution of higher learning, not VA.  Here, DeVry University issued a certification of enrollment, shortening the Veterans' final school term by 7 days by moving the end-date from December 28, 2013 to December 21, 2013.  The SCO at DeVry University reasoned that it could not certify the Veteran's period of "self-study" or "independent study" for the 7 day period from December 21, 2013 to December 28, 2013.  The SCO at DeVry University explained that they do not certify for self-study because the school has no way of telling what the student is doing during that time.  In short, the campus courses are followed by a self-study section which is not certified.  The school can only certify dates the Veteran was required to attend classes.  So the school retroactively decided it would not certify the self-study dates, resulting in an overpayment of Chapter 33 benefits by VA.  See January 2014 emails between DeVry University and VA personnel; July 2014 emails between VA officials.    

In light of the above, VA correctly determined that it had overpaid Chapter 33 benefits in the amount of $557 for the 7-day time period from December 21, 2013 to December 28, 2013.  In a February 2014 DMC letter, the Veteran was notified of the amount of the overpayment ($557) created by the excess of Chapter 33 benefits improperly paid to her.  The Board finds that the debt was validly created.  No error was committed by VA.  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.  In other words, it was DeVry University's prerogative to choose whether to issue a certificate of enrollment to VA for the self-study period from December 21, 2013 to December 28, 2013.  For the reasons discussed above, the SCO at DeVry University decided it would not certify the self-study dates.  The Board's actions are bound by the applicable law and regulations as written and VA has no power to grant benefits not authorized by law.  38 U.S.C. § 7104(c).

In view of the finding that the overpayment was not the result of sole administrative error on the part of VA, the Board finds that AOJ's decision to recoup the debt of $557 was proper, as the debt was a valid debt to VA.  Therefore, the AOJ's recovery of $557 in Chapter 33 educational benefits was legally proper.  38 U.S.C. § 5112(b) (9), (10); 38 C.F.R. § 3.500(b)(2); Jordan v. Brown, 10 Vet. App. 171 (1997).  

Nonetheless, even if the debt is deemed valid and properly created (such as the case 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(a).  But any indication of fraud, misrepresentation of a material fact, or bad faith on the part of any person having an interest in waiver of recovery of the overpayment will preclude waiver.  38 U.S.C. § 5302(c); 38 C.F.R. §§ 1.962(b), 1.963(a), 1.965(b).  An indication of either "fraud, misrepresentation or bad faith" on the part of the Appellant is found, a waiver is automatically precluded, and the principles of "equity and good conscience" will not even be considered or analyzed.  See 38 C.F.R. § 1.963(a).  "Bad faith" refers to "unfair or deceptive dealing by one who seeks to gain thereby at another's expense."  38 C.F.R. § 1.965(b)(2).  Although not undertaken with actual fraudulent intent, conduct by a claimant with intent to seek an unfair advantage, with knowledge of the likely consequences, and with resulting loss to the Government is required for a showing of bad faith.  Id.

Also, there shall be no recovery of overpayment of VA benefits if it is determined that recovery would be against "equity and good conscience."  38 U.S.C. § 5302(a); 38 C.F.R. § 1.962.  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 Appellant and the Government.  38 C.F.R. § 1.965.    

In making this determination, consideration is given to the following elements, which are not intended to be all-inclusive:  (1) Fault of the debtor (where actions of the debtors contribute to the creation of the debt); (2) balancing of faults (weighing fault of the debtor versus the fault of VA); (3) undue hardship (whether collection would deprive the debtor or family of basic necessities); (4) defeat the purpose (whether withholding of benefits or recovery would nullify the objective for which benefits were intended); (5) unjust enrichment (failure to make restitution would result in unfair gain to the debtor); (6) changing position to one's detriment (reliance on VA benefits results in relinquishment of a valuable right or incurrence of a legal obligation).  38 C.F.R. § 1.965.  

In the evaluation of whether equity and good conscience necessitates a favorable waiver decision, the Board must consider all the specifically enumerated elements applicable to a particular case.  Ridings v. Brown, 6 Vet. App. 544, 546 (1994); Cullen v. Brown, 5 Vet. App. 510, 512 (1993).  If warranted, the Board may waive a portion of the debt.  Jordan v. Brown, 10 Vet. App. 171 (1997).

The Board sees that VA has already recouped the total amount of the overpayment of $557 - this debt was already withheld from VA benefits sent to the Veteran.  However, in accordance with Franklin v. Brown, 5 Vet. App. 190, 193 (1993), the Board will consider the entire overpayment.  In this regard, any portion of an indebtedness resulting from participation in benefits programs administered by VA which has been recovered by the U.S. Government from the debtor may still be considered for waiver.  38 C.F.R. § 1.967(a).  

The Board, like the Committee, does not find any indication of fraud, misrepresentation, or bad faith on the Veteran's part that would preclude waiver.  38 U.S.C. § 5302(c); 38 C.F.R. §§ 1.962(b), 1.963(a), 1.965(b).  She neither acted inappropriately, nor did she fail to act in some way.  Accordingly, the evidence of record does not clearly show fraud, misrepresentation, or bad faith on her part in the creation of the overpayment.  She genuinely believes she is legally entitled to the $557 VA originally certified for her period of self-study from December 21, 2013 to December 28, 2013.  

Therefore, the Board must determine whether recovery of the overpayment of Chapter 33 educational benefits is against equity and good conscience.  38 U.S.C. § 5302(a); 38 C.F.R. § 1.962.  In the present case, the evidence weighs in favor of a finding that recovery of the overpayment by VA is against equity and good conscience.  VA was not entitled to recover its overpayment in the amount of $557.    In making this favorable determination for the Veteran, the Board recognizes that there exists to some extent unjust enrichment to the Veteran.  She submitted an April 2014 Financial Status Report (FSR, VA Form 20-5655) revealing that her monthly income exceeds her expenses by $2,799.60.  She added that she did not owe the debt anymore - VA already recouped the $557.  Therefore, she is clearly not struggling financially.  There is no undue hardship on the Veteran's part.  

However, with regard to the issue of fault, originally, the school had certified the self-study period from December 21, 2013 to December 28, 2013.  VA made the payment to the school for this time period based on school's initial certification.  As such, there is some fault on the part of the school, but not the VA.  As to the balancing of faults, the Veteran reasonably believed that VA would compensate her for her final term in school through December 28, 2013, including her week of self-study.  In this regard, a December 2013 Keller Graduate School of Management Syllabus specified that all lectures were required including the B6 self-study lecture.  Failure to complete the B6 self-study lecture would result in unsatisfactory grade for the course, according to the syllabus.   

In addition, another factor to be considered is whether recovery of the overpayment at issue would defeat the purpose for which the benefits were intended.  38 C.F.R. § 1.965(a)(4).  In this case, the Chapter 33 benefits paid to the Veteran were intended to assist her in completing higher education classes to earn an accounting degree and prepare for her CPA examination.  The Veteran successfully completed her program of education in accounting during the term for which she was receiving Chapter 33 benefits from VA.  She now has a gainful occupation as a result of her hard work and dedication in securing her degree, to include her week of self-study.  The self-study period was a mandatory part of her degree according to the school's syllabus.  Moreover, VA regulations provide that a veteran may pursue a course by independent study either entirely or in part under 38 C.F.R. §§ 21.128 and 21.4267.     

In conclusion, after carefully weighing all relevant factors set forth above, and considering the benefit of the doubt doctrine set forth in 38 U.S.C. § 5107, the Board concludes that recovery of the overpayment of Chapter 33 VA educational benefits would be against equity and good conscience.  38 U.S.C. § 5302(a); 38 C.F.R. § 1.962.  Therefore, the Veteran's waiver of recovery of the overpayment in the amount of $957 is granted.   

	(CONTINUED ON NEXT PAGE)



ORDER

The overpayment of Chapter 33 (Post-9/11 GI Bill) education benefits in the amount of $557 is a valid debt and was properly created.  

Waiver of recovery of an overpayment of Chapter 33 (Post-9/11 GI Bill) education benefits in the amount of $557 is granted.




____________________________________________
DAVID L. WIGHT
Veterans Law Judge, Board of Veterans' Appeals

Department of Veterans Affairs