Citation Nr: 19130226 Decision Date: 04/17/19 Archive Date: 04/17/19 DOCKET NO. 15-03 553A DATE: April 17, 2019 ORDER An overpayment of Post-9/11 GI Bill (Chapter 33) educational assistance benefits in the amount of $3,913.30 was validly created. Waiver of an overpayment of Post-9/11 GI Bill (Chapter 33) educational assistance benefits in the amount of $3,913.30 is denied. FINDINGS OF FACT 1. In February 2014, VA was notified that the Veteran had amended his training period at the University of Phoenix (online) from the term of November 25, 2013, to February 3, 2014, to the term of January 6, 2014 to March 3, 2014, creating an overpayment in housing allowance of $840.72. 2. In February 2014, VA was notified that the Veteran reduced his distance learning credit hours at the University of Phoenix (online) from 6 credit hours to 3 credit hours for the term of January 6, 2014 to March 3, 2014, effective January 20, 2014. 3. In April 2014, VA was notified that the Veteran dropped the term of January 6, 2014, to March 3, 2014, effective January 27, 2014, the last date of his attendance, and he received a nonpunitive grade, creating an overpayment of $125.00 in books, $1,139.97 in tuition and fees and $676.39 in housing allowance. 4. In April 2014, VA was informed that the Veteran withdrew from enrollment at the University of Phoenix (online) for the term of March 10, 2014, to May 6, 2014, effective March 9, 2014, creating an overpayment of $250.00 in books and $881.22 in housing allowance. 5. The creation of the overpayment of VA educational assistance benefits in the total amount of $3,913.30, covering the period from November 25, 2013, to May 5, 2014, was not due solely to administrative error; the Veteran was at fault in the creation of the overpayment, although the creation of the overpayment was not the result of fraud, misrepresentation, or bad faith on the part of the Veteran. 6. Repayment of the overpayment debt, which has already been repaid, would not deprive the Veteran of the basic necessities of life and would not result in financial hardship; recovery of the overpayment would not defeat the purpose for which benefits were intended. 7. The failure of the Government to insist upon its right to repayment of the assessed overpayment would result in unjust enrichment of the Veteran. 8. The Veteran has not relinquished a valuable right or incurred any legal obligations resulting from reliance on VA benefits. CONCLUSIONS OF LAW 1. The overpayment of Post-9/11 GI Bill (Chapter 33) educational assistance in the amount of $3,913.30 was validly created. 38 U.S.C. §§ 5112, 5302 (2012); 38 C.F.R. §§ 1.956, 1.962, 3.500, 21.4009, 21.9635 (2018). 2. The criteria for waiver of recovery of an overpayment of Post-9/11 GI Bill (Chapter 33) educational assistance in the amount of $3,913.30, have not been met. 38 U.S.C. § 5302; 38 C.F.R. §§ 1.963, 1.965. REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veteran served on active duty from July 1995 to July 1999, and from September 2001 to June 2004. This matter comes to the Board of Veterans’ Appeals (Board) on appeal from a June 2014 determination by the Department of Veterans Affairs (VA) Debt Management Center Committee on Waivers and Compromises. This matter was previously before the Board in June 2018 at which time the Board remanded the case to the Agency of Original Jurisdiction (AOJ) for additional development. In this regard, the AOJ was directed to provide a detailed audit and explanation regarding the creation of the debt. There has been substantial compliance with the Board’s June 2018 remand directives. Stegall v. West, 11 Vet. App. 268 (1998). I. Validity of the Debt 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. 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) (2018); 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 claimant was either legally entitled to the benefits in question or, if the claimant was not legally entitled, then it must be shown that VA was solely responsible for the claimant 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 claimant neither had knowledge of nor should have been aware of the erroneous award. Further, neither the claimant'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) (2012); 38 C.F.R. § 3.500 (b)(2) (2018); 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. The governing law regarding eligibility for educational assistance under 38 U.S.C. Chapter 33 (Post-9/11) can be found at 38 U.S.C. § 3301; 38 C.F.R. § 21.9520. Initially, the Board notes that there is no dispute the Veteran has satisfied the eligibility requirements for Chapter 33 (Post-9/11 GI Bill) education benefits as he has already been deemed eligible for such. The overpayment in this case is a result of Chapter 33 payments that VA made to the Veteran for classes that he enrolled in, but later reduced and/or withdrew from. School enrollment certifications show that VA was notified in February 2014 that the Veteran’s training period at the University of Phoenix (online) was amended for the term of November 25, 2013 to February 3, 2014, to the term of January 6, 2014, to March 3, 2014. Accordingly, the AOJ calculated an overpayment in housing allowance of $840.72. In this regard, the AOJ explained in the November 2018 supplemental statement of the case that effective in October 2011, individuals who meet basic monthly housing allowance eligibility requirements and are taking only distance learning courses will be paid a monthly housing allowance based on 50 percent of the national average of the basic housing allowance rates payable on a pro-rated by benefit level. 38 U.S.C. § 3313 (c)(1)(B)(iii). The school further notified VA in February 2014 that the Veteran’s 6 distance learning credits had been reduced to 3 credits for the term of January 6, 2014, to March 3, 2014, effective January 20, 2014, and that he was assigned a non-punitive grade. The school thereafter informed VA in April 2014 that the Veteran had dropped the term of January 6, 2014, to March 3, 2014, effective January 27, 2014, which is the last date that he attended. Accordingly, the AOJ calculated an overpayment of $1,139.97 in tuition and fees, $125 in books, and $676.39 in housing allowance. Also in April 2014, the school informed VA that the Veteran withdrew 3 distance learning hours for the term of March 10, 2014, to May 5, 2014, effective March 9, 2014, which was before the beginning of the term. This resulted in a $250 overpayment in books and an $881.22 overpayment in housing allowance. The calculated debts discussed above total $3.913.30. Pertinent VA regulation provides that when an individual for reasons other than being called or ordered to active duty withdraws from all courses or receives all nonpunitive grades and, in either case, there are no mitigating circumstances, VA will terminate or reduce educational assistance effective the first date of the term for which nonpunitive grades are assigned. 38 C.F.R. § 21.9635(c)(1). If the eligible person withdraws from all courses with mitigating circumstances or withdraws from all courses for which a punitive grade is or will be assigned, VA will terminate education assistance for distance leaving effective on the official date of change in status under the practice of the institution of higher learning. 38 C.F.R. § 21.9635(c)(2)(ii). Mitigating circumstances means circumstances beyond the individual's control that prevent him or her from continuously pursuing a program of education. 38 C.F.R. § 21.9505. Examples of mitigating circumstances, which include but are not limited to: (1) an illness or mental illness of the individual; (2) an illness or death in the individual's family; (3) an unavoidable change in the individual's conditions of employment; (4) an unavoidable geographical transfer resulting from the individual's employment; (5) immediate family or financial obligations beyond the control of the individual that require him or her to suspend pursuit of the program of education to obtain employment; (6) discontinuance of the course by the educational institution; (7) unanticipated active duty for training; or (8) unanticipated difficulties in caring for the individual's child or children. Id. In the instant case, the Veteran does not specifically dispute the validity of the debt. Rather, he asserts that there were mitigating circumstances. In this regard, he asserts that he struggled with physical and psychiatric conditions which is why he was not able to successfully complete his courses. His assertion in this regard has been considered and has been found to meet the criteria for mitigating circumstances. 38 C.F.R. § 21.9505. This is why the debt for the term that the Veteran actually attended in part, from January 6, 2014 to March 3, 2014, was calculated effective from the date of the Veteran’s last enrollment on January 27, 2014, rather than the beginning of the term on January 6, 2014. See 38 C.F.R. §§21.9635(c)(1), (2)(ii). Moreover, the Veteran was not legally entitled to the benefits that he received. That is, he was not entitled to any educational benefits effective the date that his enrollment terminated for the term from January 6, 2014, to March 3, 2014, on January 27, 2014. 38 C.F.R. § 21.9635(c)(2)(ii). He was also not entitled to receive educational assistance benefits for terms of school that he did not actually attend, that is, from November 25, 2013 to February 3, 2014, and from March 10, 2014 to May 5, 2014. Additionally, the overpayment was not solely due to VA administrative error. Records show that VA paid Post-9/11 GI Bill educational assistance benefits for tuition/fees, books and room and board based on the Veteran's enrollment certifications showing his attendance at the University of Phoenix (online) for the terms November 25, 2013 to February 3, 2014, from January 6, 2014 to March 3, 2014, and from March 10, 2014 to May 5, 2014. However, as is outlined above, the Veteran amended his initial training period for the November 25, 2013, to February 3, 2014, term to the January 6, 2014, to March 3, 2014 term; reduced his credits hours from 6 to 3 distance learning hours for the January 6, 2014, to March 3, 2014, effective January 20, 2014, then dropped this term altogether effective January 27, 2014. He also withdrew for the term March 10, 2014 to May 5, 2014, effective March 9, 2014. VA was not made aware of these changes until after the payments had been made, thus creating the overpayments at issue. Furthermore, the Veteran should have been aware that he was not entitled to these payments since he had been informed in numerous award letters starting in 2012 that VA generally cannot pay him for courses that he did not attend or withdrew from, or any course that he completed but received a grade which will not count towards graduation. He was additionally informed in these letters that he was responsible for all debts resulting from reductions or terminations of his enrollment even if the payment was submitted directly to the school on his behalf. See Jordan v. Brown, 10 Vet. App. 171 (1997). Accordingly, for the foregoing reasons, the Veteran was not legally entitled to the benefits in question nor was VA solely responsible for him being erroneously paid the benefits. Thus, the debt in the amount of $3,913.30 is valid. II. Waiver Applicable law and regulations provide that recovery of overpayments of any benefits made under the laws administered by VA shall be waived if there is no indication of fraud, misrepresentation, or bad faith on the part of the person or persons having an interest in obtaining the waiver, and if the recovery of the indebtedness from the payee who received such benefits would be against equity and good conscience. 38 U.S.C. § 5302; 38 C.F.R. §§ 1.962, 1.963(a), 1.965. The phrase “equity and good conscience” means the arrival at a fair decision between the obligor and VA. In making this determination, consideration will be given to the following elements (which are not intended to be all-inclusive): (1) fault of the Veteran; (2) balancing of faults between the Veteran and VA; (3) undue hardship of collection on the Veteran; (4) defeat of the purpose of an existing benefit to the Veteran; (5) unjust enrichment of the Veteran, and (6) whether the Veteran changed positions to his detriment in reliance upon a granted VA benefit. 38 U.S.C. § 5302; 38 C.F.R. § 1.965 (a). The standard of “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 VA’s rights. The decision reached should not be unduly favorable or adverse to either side. 38 C.F.R. § 1.965 (a); see also Ridings v. Brown, 6 Vet. App. 544, 546 (1994). The Board finds no evidence of fraud, misrepresentation, or bad faith on the part of the Veteran in the creation of the overpayment, thus removing any legal impediment to the granting of a waiver in this matter. The question now before the Board is whether the facts dictate that a waiver should be granted under the standard of “equity and good conscience.” The Veteran asserts that having to pay back the debt would result in a financial hardship to his family. He submitted two Financial Status Reports, one in April 2014 and one in July 2014. There are notable discrepancies between these reports. In one report he reports monthly child and alimony payments totalling $1381.80, and in the other report he does not report any such payments. Also, there is a discrepancy in excess of $700 in the amount of Social Security Disability payments that he reported receiving. In addition, there are discrepancies in reported expenses including cable and internet and utilities and heat. In any event, the Veteran was consistent in both reports in showing a net monthly loss. Nonetheless, records show that he has already repaid the debt. Thus, repayment of the debt did not deprive him of the basic necessities of life. Moreover, a current waiver of the debt would not alleviate any past hardship that was imposed. With respect to the other elements pertaining to the principles of equity and good conscience as set forth by 38 C.F.R. § 1.965 (a), the Board finds that recovery of the overpayment would not defeat the purpose for which benefits were intended. The Veteran was erroneously paid education benefits. That is, he was paid for attending school for a period of that that he did not actually attend. Recouping overpayment of these benefits would not defeat the purpose thereof. Additionally, because the debt has already been repaid, a waiver of such an overpayment would essentially require VA to pay the Veteran additional benefits that were not due to him. Thus, the collection of the debt did not defeat the purpose for which the benefits were intended. Also, regarding balancing of faults, VA had no fault in creating the overpayment as payments were made upon certification from the University of Phoenix (online) of the Veteran’s enrollment for terms covering the period from November 25, 2013 to May 5, 2014. The Board finds that the failure of the Government to insist upon its right to repayment of the assessed overpayment which has already been recovered would result in unjust enrichment of the Veteran as he would be able to recuperate funds which he was not entitled to. In addition, there is no evidence showing that the Veteran relinquished a valuable right or incurred any legal obligations resulting from reliance on VA benefits. For the reasons discussed above, the Board finds that the recovery of the overpayment would not be against the principles of equity and good conscience. See 38 C.F.R. §§ 1.963, 1.965. Because the preponderance of the evidence is against the claim for a waiver of recovery of the overpayment of VA benefits in the amount of $3,913.30, the benefit of the doubt doctrine is not for application and the claim is denied. See 38 U.S.C. § 5107; 38 C.F.R. § 3.102. Kristin Haddock Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD A. Shawkey, Counsel