Citation Nr: 20040145 Decision Date: 06/11/20 Archive Date: 06/11/20 DOCKET NO. 15-00 003A DATE: June 11, 2020 ORDER The overpayment of Chapter 33 (Post 9/11 GI Bill) education benefits in the amount of $1,213.93 for tuition and fees at American Intercontinental University for the period from April 23, 2012, to May 23, 2012, is a valid debt. Entitlement to waiver of Chapter 33 education benefits in the amount of $1,213.93 for tuition and fees at American Intercontinental University from April 23, 2012, to May 23, 2012, is denied. FINDINGS OF FACT 1. An overpayment of Chapter 33 education benefits in the amount of $1,213.93 for tuition and fees at American Intercontinental University for the period from April 23, 2012, to May 23, 2012, was properly created. 2. There is no evidence of fraud, misrepresentation, or bad faith on the appellant’s part in the creation of this debt. 3. Recovery of this debt by VA would not be against equity and good conscience. CONCLUSIONS OF LAW 1. The overpayment of Chapter 33 (Post 9/11 GI Bill) education assistance benefits in the amount of $1,213.93 for tuition and fees at American Intercontinental University from April 23, 2012, to May 27, 2012, is a valid debt. 38 U.S.C. § 3301 (2018); 38 C.F.R. §§ 21.4009, 21.9505, 21.9680, 21.9720, 21.9635, 21.9695 (2019). 2. The criteria for waiver of recovery of the overpayment of Chapter 33 benefits in the amount of $1,213.93 for tuition and fees at American Intercontinental University from April 23, 2012, to May 27, 2012, have not been met. 38 U.S.C. §§ 5107, 5302 (a) (2018); 38 C.F.R. §§ 1.962, 1.963 (a), 1.965(a) (2019). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veteran served on active duty from December 2010 to January 2012. This appeal comes to the Board of Veterans’ Appeals (Board) on appeal from a March 2014 decision of the Department of Veterans Affairs (VA) Regional Office (RO). The Veteran was scheduled to attend a Board hearing in November 2017 pursuant to her December 2014 request for such hearing. However, the record shows that she did not report to the hearing and she did not request that it be rescheduled. This matter was previously before the Board in June 2018 and September 2019, at which times the case was remanded for additional development. 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 (1991). 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); 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. The overpayment of education assistance benefits at issue involves a payment under Chapter 33. The specific statutory and regulatory provisions governing Chapter 33 benefits, to include payment and discontinuation, are found under 38 U.S.C. §§ 3301 to 3327 and 38 C.F.R. §§ 21.9500 to 21.9770. At the outset, there is no dispute that the Veteran meets the basic eligibility requirements for Chapter 33 Post-9/11 GI Bill educational benefits. 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 of educational assistance paid to an eligible individual under 38 U.S.C. Chapter 33 constitutes a liability of that individual (unless (i) The overpayment was waived as provided in §§1.957 and 1.962 of this chapter, or (ii) The overpayment results from an administrative error or an error in judgment per § 21.9635(r)). See 38 C.F.R. § 21.9695 (b)(1). 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). In order for the overpayment to be considered the result of sole administrative error, and for the appellant to consequently not be liable for the debt, the appellant must not have known, or should not have known, that the VA educational benefits were erroneous. In other words, 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. 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). 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, and it is independent study or distance learning, VA will terminate education assistance on the official date of change in status under the practices of the institution of higher learning. 38 C.F.R. § 21.9635 (c)(2)(ii). Examples of mitigating circumstances 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. See 38 C.F.R. § 21.9505. The Veteran in this case was informed in April 2012 that she was being awarded Chapter 33 education benefits for her enrollment at American Intercontinental University Atlanta Campus, for 4.5 distance credit learning hours, as certified by the school, for the term dates from April 23, 2012, to May 27, 2012. She was also informed that the amount that was charged for this period was $2000.00. She was additionally informed that she must promptly notify the school’s certifying official and VA if there is any change in enrollment. Further, she was told that VA generally cannot pay for courses you do not attend or withdraw from. Finally, VA stated that the Veteran was responsible for all debts resulting from reductions or terminations of her enrollment even if the payment was submitted directly to the school on her behalf. In April 2012, the AOJ received a Notice of Change in Student Status form (VA Form 22-1999b) regarding a correction of tuition and fees for the April 23, 2012, to May 27, 2012, spring term to $1,287.50. This form continues to show that the Veteran was enrolled in 4.5 distance hours for the term. In July 2012, the AOJ received a second Notice of Change in Student Status form from the school for the April 23, 2012, to May 27, 2012, spring term informing VA that the Veteran withdrew 4.5 distance hours term leaving 0 distance hours. This record also notes that the withdrawal was during the drop period and was effective on April 24, 2012. After adjusting the amount of educational assistance that VA paid in tuition and fees for the period from April 23, 2012, to May 27, 2012, that the Veteran did not attend, from the amount of educational assistance that was paid for the time that she did attend, the AOJ determined that there was an overpayment in the calculated amount of $1,213.93. The Veteran was informed of the overpayment in writing by the Agency of Original Jurisdiction (AOJ) in September 2012 and by the VA’s Debt Management Center in October 2012. As noted, the Veteran’s education benefits for the April 23, 2012, to May 27, 2012, spring term were terminated effective on the date that the Veteran withdrew from the term, on April 24, 2012. This is pursuant to 38 C.F.R. § 21.9635 (c)(2)(ii) which, as noted above, determines the effective date for distance learning when there are mitigating circumstances. There is simply no basis to award her additional educational benefits for the part of this term that she did not actually attend. Additionally, the overpayment was not solely due to VA administrative error. The evidence shows that VA paid Post-9/11 GI Bill educational assistance benefits for tuition and fees, based on the Veteran’s enrollment certification showing her attendance at American Intercontinental University for 4.5 distance learning hours for the academic term from April 23, 2012, to May 23, 2012. Furthermore, the Veteran should have been aware that she was not entitled to these payments since she had been informed in her August 2012 VA award letter that VA generally cannot pay her for courses that she did not attend or withdrew from. Thus, the overpayment was not the result of sole administrative error on the part of VA as VA acted on the change in enrollment as soon as it was notified by the school certifying official, and the Veteran should have realized that she was not entitled to the full benefits that she received. 38 U.S.C. § 5112 (b)(9), (10); 38 C.F.R. § 3.500 (b)(2); Jordan v. Brown, 10 Vet. App. 171 (1997). The law is clear that the purpose of the VA educational assistance programs is to provide for the pursuit of education, and in this case, the Veteran received benefits for educational courses that she did not complete. Thus, the Board finds that the debt in the amount of $1,213.93 for Post-9/11 GI Bill benefits was proper, as the debt was a valid debt to VA. Waiver of Debt As noted above, an overpayment of educational assistance paid to an eligible individual under 38 U.S.C. Chapter 33 constitutes a liability of that individual (unless (i) The overpayment was waived as provided in §§1.957 and 1.962 of this chapter, or (ii) The overpayment results from an administrative error or an error in judgment per § 21.9635(r)). See 38 C.F.R. § 21.9695 (b)(1). Also as noted above, it has been determined that the overpayment at issue is not the result of administrative error or an error in judgment per § 21.9635(r)). Thus, the next question to be determined is whether the Veteran is entitled to a waiver of the debt. 38 C.F.R. § 21.9695 (b)(1). As a starting point, there is no evidence demonstrating that the indebtedness resulted from fraud, misrepresentation, or bad faith on the appellant’s part. Consequently, waiver of indebtedness is not precluded if shown that it would be against the principles of equity and good conscience to require the appellant to repay this debt to the government. 38 C.F.R. §§ 1.962, 1.963, 1.965. 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 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 obligor and the government. In making this determination, consideration will be given to the following elements, which are not intended to be all-inclusive: 1. Fault of the debtor. Whether the actions of the debtor contributed to the creation of the debt. 2. Balancing of faults. Weighing of the fault of the debtor against that 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. Whether failure to make restitution would result in unfair gain to the debtor. 6. Changing position to one’s detriment. Whether reliance on VA benefits resulted in relinquishment of a valuable right or the incurrence of a legal obligation. 38 C.F.R. § 1.965 (a). In terms of fault and the balancing of faults, the Veteran was at fault in the creation of the overpayment since she should have known that she was not entitled to benefits for a period of school that she did not actually attend. VA, on the other hand, had no fault in creating the overpayment as payments were made upon certification from American Intercontinental University (online) of the Veteran’s enrollment for the term covering the period from April 23, 2012, to May 27, 2012. Regarding undue hardship, the Veteran’s completed Financial Status Reports in November 2013 and August 2014. Neither report shows that having to repay the debt would deprive her of life’s basic necessities. Rather, both reports show that her monthly income exceeded her monthly expenses and that she was willing to pay $100 a month towards the debt. With respect to the remaining 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, she was paid for attending school for a period that that she did not actually attend. Recouping overpayment of these benefits would not defeat the purpose of the benefits. Additionally, because it appears that 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 her. Accordingly, the collection of the debt did not defeat the purpose for which the benefits were intended. Moreover, 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 she would be able to recuperate funds which she 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. When the Veteran initiated this appeal, there was confusion between her and VA regarding the nature and period of the debt which is documented in the record. Later, when filing the substantive appeal in December 2014, the Veteran said that since the debt in the amount of $1,213.93 had been substantiated, she had no problem paying it back. Indeed, she said that steps had already been made to recoup it. However, she took issue with how the debt had been handled and collected, to include referral to the Department of Treasury. While the Board is very sympathetic to the Veteran in this regard, the Board’s jurisdiction in the matter is limited to issue of the waiver request, to include whether the debt is valid. It does not have the authority to determine the manner in which the debt is collected. 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 $1,213.93, 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 The Board’s decision in this case is binding only with respect to the instant matter decided. This decision is not precedential and does not establish VA policies or interpretations of general applicability. 38 C.F.R. § 20.1303.