Citation Nr: 21024663 Decision Date: 04/23/21 Archive Date: 04/23/21 DOCKET NO. 18-15 767 DATE: April 23, 2021 ORDER An overpayment of Chapter 33 (Post-9/11 GI Bill) educational assistance in the amount of $11,453.30 was properly created and the appeal is denied. A waiver of overpayment of Chapter 33 education benefits in the amount of $11,453.30 is granted. FINDINGS OF FACT 1. The Veteran took courses at Columbia College which were not eligible for VA educational benefits resulting in the $11,453.30 overpayment. 2. Recovery of the $11,453.30 overpayment of Chapter 33 education benefits would result in undue financial hardship to the Veteran and, applying the standards of equity and good conscience, waiver is appropriate. CONCLUSIONS OF LAW 1. The $11,453.30 overpayment of educational assistance benefits under the Chapter 33 Post-9/11 GI Bill is valid. 38 U.S.C. § 3685; 38 C.F.R. §§ 21.9635, 21.9640. 2. The criteria for a waiver of recovery of the $11,453.30 overpayment of Chapter 33 education benefits have been met. 38 U.S.C. § 5302; 38 C.F.R. §§ 1.962, 1.963, 1.965(a). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veteran served on active duty from October 2008 to February 2009, and from January 2011 to January 2012. He provided testimony at a hearing before the undersigned Veterans Law Judge in July 2018. A transcript of this hearing is of record. Two issues are before the Board – i) whether the debt in the amount of $11,453 was properly created, and ii) whether the Veteran is entitled to waiver of the debt. Validity of the Debt As to the question on the validity of the debt, 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, educational assistance benefits and subsistence allowance, insurance benefits, burial and plot allowances, clothing allowance, and automobile or other conveyance and adaptive equipment allowances. See 38 C.F.R. § 1.956(a). For a determination that an overpayment was not properly created, such that the debt is 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. 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). The record reflects an overpayment of Chapter 33 education benefits was created when a compliance survey was completed on the educational institution to which the Veteran was attending, and which resulted in a correction of the submitted enrollment certifications. In light of this survey, VA took corrective action which resulted in the overpayment. In July 2016, VA informed the Veteran that an overpayment of Chapter 33 educational benefits in the amount of $18,366.27 had been created. He was notified that the overpayment had arisen because he withdrew from some courses; however, the record reflects that he had not withdrawn from any of his classes. The RO later corrected this mistake noting that the overpayment resulted when he received Chapter 33 benefits for classes which were not in his degree plan and thus not eligible for such benefits. In August and September 2016 correspondence, the Veteran challenged the amount of the overpayment and requested a waiver of the overpayment. He argued that his school was not offering enough courses in his major for him to take a full load. He maintained that the additional courses that he took were general courses that all students could take to finish an associate degree at this college. He said that no one informed him that his taking those courses would be considered a “change of enrollment.” He asserted that VA had wrongly determined that he had overpayments for some semesters in which all the courses that he took were VA approved courses. In April 2017, VA sent the Veteran a letter showing that his overpayment had been recalculated and that the corrected amount consisted of $373 for tuition and fees, $275 for books and supplies, and $11,350.36 for housing allowance. In January 2018, he sent a copy of the April 2017 VA letter back to VA with his own corrections. He indicated that the overpayment should consist of $240 for tuition and fees, $75 for books and supplies, and $9911 for housing allowance. At the July 2018 hearing, the Veteran asserted that although the amount of overpayment reported in the November 2017 statement of the case was incorrect, the current amount calculated by VA was very close to correct. In December 2020, pursuant to the Board’s November 2018 remand decision, the RO again calculated the Veteran’s overpayment and provided an accounting verifying that the total overpayment was $11,435.30. Based on the above, the overpayment was validly created because the Veteran was paid VA educational benefits for courses that were not part of his degree plan. VA paid these educational benefits, to which he was not entitled, based on the certification from the school. Thus, the creation of the overpayment was not due to sole VA administrative error. The Veteran does not currently assert that the basis for the finding of an overpayment was not valid; rather, he maintains that he originally thought that all of his courses were creditable for Chapter 33 educational benefits and that he had not been aware that some of them were not. This assertion, however, does not go to the question of whether the overpayment should be waived. Although the Veteran originally asserted that the amount of the overpayment was grossly incorrect, the amount of the overpayment has been corrected. As noted in the hearing testimony, the current amount of the overpayment has been adjusted and he acknowledged that it was close to his own calculations. At the hearing, he did not specifically challenge the VA’s calculated number as it was close to his own. Regardless, the Board has reviewed the December 2020 calculations and notes that it thoroughly documents the overpayment amount. This amount includes a kicker overpayment that the Veteran did not include in his calculations. Due to the fact that he was being paid educational benefits for courses that were not eligible for Chapter 33 benefits, he received overpayments of books and supplies ($75), tuition and fees ($363) and housing allowance plus kicker ($10,997.30) resulting in the total amount of $11,453.30. Based on the above, the overpayment of Chapter 33 benefits was validly created in the amount of $11,453.30. Waiver of the Overpayment Having found that the debt was validly created, the next question is whether the Veteran is entitled to a waiver of the debt. The law provides that there shall be no recovery of overpayments of any benefits under any of the laws administered by the Secretary of VA, whenever it is determined that recovery would be against equity and good conscience, if application for relief is made within 180 days of notification. 38 U.S.C. § 5302(a). Here, the Veteran submitted his application for a waiver in September 2016, within the 180-day timeframe. The standard “equity and good conscience” will be applied when the facts and circumstances in a 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. Under 38 U.S.C. § 5302(c) and 38 C.F.R. § 1.965(b), a finding of fraud, misrepresentation, or bad faith precludes a grant of a waiver of recovery of an overpayment. The Committee on Waivers and Compromises concluded that the facts in this case did not show that the mandatory bars to waiver applied, and the Board similarly finds. There is no indication that the Veteran attempted to defraud VA by misrepresenting any relevant facts with respect to his benefits. Addressing the factors set forth in 38 C.F.R. § 1.965(a), the creation of the debt resulted from the Veteran enrolling in classes that were not in his degree plan. The school certified these classes, along with the appropriate classes, to VA for payment of educational benefits. In July 2016, a Compliance Survey determined that the training facility incorrectly certified credit hours for courses that were not in his degree plan. The Veteran testified that he was not aware that some of the courses he took were not eligible for Chapter 33 benefits. He asserts that VA never told him that such classes did not entitle him to Chapter 33 educational benefits. He also pointed out that his school VA counselor never told him that such classes were not reimbursable. Given that both the Veteran and his school were unaware that the courses were not Chapter 33 eligible, the fault on the part of the Veteran was not substantial. Further, collection of the overpayment would defeat the purpose of an existing benefit. The Veteran testified that he had not finished his education because he was worried about paying back his overpayment which prevented him from continuing his education and using his remaining Chapter 33 educational benefits. Additionally, the collection of the overpayment would result in undue hardship. Undue hardship is found when collection would deprive a debtor of basic necessities. 38 C.F.R. § 1.965 (a)(3). Although 38 C.F.R. § 1.965(a)(3) does not define “basic necessities,” the regulation elsewhere defines the “necessities of life” as food, housing, clothing, transportation, and medical care. See 38 C.F.R. §§ 1.981(g) and 3.24(d)(6). On VA Financial Status Reports (FSR), VA Form 5655, submitted by the Veteran in October 2016 and March 2017, he reported that his monthly income exceeded his monthly expenses by only $17. He reported on his FSR that having to pay back the overpayment would cause him severe financial difficulty, even to the extent of homelessness. On a January 2018 VA Form 9, the Veteran reported that he has been experiencing health issues and that the overpayment was causing him tremendous emotional stress. At the July 2018 hearing, he reported that he had multiple health issues, including Hashimoto’s thyroiditis, anemia, gastrointestinal problems, respiratory problems and chronic fatigue which made it difficult to work and to pay back the overpayment. VA treatment records confirm that the Veteran has been treated for thyroiditis, gastrointestinal problems, and sleep apnea. Based on the above, the Board finds that recovery of the debt would create further significant financial hardship to the Veteran and deprive him of basic necessities. Given the Veteran’s limited income, any unjust enrichment concerns are outweighed by the undue hardship that the he would experience as a consequence of repayment. Based on the evidence of record, and after weighing all of the equities involved, recovery of the overpayment from the Veteran would be against equity and good conscience. Thus, the Veteran’s request for waiver of recovery of the overpayment is granted. L. HOWELL Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board R. E. Jones, 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.