Citation Nr: 21029507 Decision Date: 05/13/21 Archive Date: 05/13/21 DOCKET NO. 17-16 533 DATE: May 13, 2021 ORDER The overpayment of VA Post-9/11 GI Bill (Chapter 33) education benefits in the amount of $3,499.51 was properly created. A waiver of recovery of an overpayment of Chapter 33 education benefits in the amount of $3,499.51 is denied. The overpayment of Chapter 33 housing allowance benefits in the amount of $1,346.40 was properly created. A waiver of recovery of an overpayment of Chapter 33 housing allowance benefits in the amount of $1,346.40 is denied. The overpayment of educational assistance under the Post 9/11 GI Bill in the calculated amount of $5,541.49 was not properly created; the appeal is therefore granted, subject to controlling regulations governing the payment of monetary awards. The issue of entitlement to waiver of the recovery of educational assistance benefits under the Post 9/11 GI Bill in the calculated amount of $5,541.49 is dismissed as moot. FINDINGS OF FACT 1. The overpayment of Chapter 33 education benefits in the amount of $3,499.51 and housing allowance benefits in the amount of $1,346.40 were each properly created; therefore, the debts are valid. 2. The Veteran is not shown to have committed fraud, misrepresentation, or bad faith in the creation of the overpayment. 3. The Veteran was fully at fault for the creation of the debts in the amounts of $3,499.51 and $1,346.40, and the recovery of those debts would not create an undue hardship for him or defeat the purpose of the benefits. 4. The overpayment of Chapter 33 educational assistance benefits in the amount of $5,541.49 (for education benefits and housing allowance benefits) was due to VA administrative error and the debt is invalid. CONCLUSIONS OF LAW 1. The debt created by the overpayment of Chapter 33 educational assistance benefits in the amounts of $3,499.51 and $1,346.40 is valid. 38 U.S.C. § 5302; 38 C.F.R. §§ 21.7136, 21.7144. 2. Recovery of the overpayment of Chapter 33 educational assistance benefits in the amounts of $3,499.51 and $1,346.40 would not be against equity and good conscience. 38 U.S.C. § 5107, 5302; 38 C.F.R. §§ 1.962, 1.963, 1.965. 3. The debt created by the overpayment of Chapter 33 educational assistance benefits in the amount of $5,541.49 is not valid. 38 U.S.C. §§ 3002, 3011; 38 C.F.R. §§ 21.7020 (b)(19), 21.7070, 21.7144, 21.7153. 4. The issue of entitlement to waiver of recovery of overpayment of Chapter 33 educational assistance benefits in the amount of $5,541.49 is moot. 38 U.S.C. § 5302; 38 C.F.R. §§ 1.962, 1.963, 1.965, 20.101. REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veteran had active service from November 2003 to November 2007. An October 2020 Board decision remanded the issues on appeal for further development. That development has been accomplished, and the claim has now been returned to the Board for further action. Stegall v. West, 11 Vet. App. 268 (1998). Validity of Debts VA shall pay to each individual entitled to basic educational assistance who is pursuing an approved program of education, an educational assistance allowance to help meet in part, the expenses of such individual subsistence, tuition, fees, supplies, books, equipment and other educational costs. See 38 U.S.C. §§ 3002, 3014(a); 38 C.F.R. §§ 21.7120, 21.7130. An eligible claimant is entitled to a monthly benefit for periods of time during which he or she is enrolled in, and satisfactorily pursuing, an approved program of education. See 38 U.S.C. § 3014; 38 C.F.R. § 21.7140. An educational institution must certify an individual's enrollment before he may receive educational assistance. See 38 C.F.R. §§ 21.7140, 21.7152. A claimant must report to VA, without delay, a change in credit hours or clock hours of attendance if that change would result in less than full-time enrollment, as well as any change in his pursuit that would result in less than full-time enrollment. 38 C.F.R. §§ 21.7156. A beneficiary is charged with knowing the rules governing compensation. Dent v. McDonald, 27 Vet. App. 362, 382 (2015) (summarizing Jordan v. Brown, 10 Vet. App. 171, 174-75 (1997)). A person may have actual or constructive knowledge of a fact, the latter of which is defined as "[k]nowledge that one using reasonable care or diligence should have, and therefore that is attributed by law to a given person." Dent, 27 Vet. App. at 380. 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. VA will not pay benefits for a course from which the claimant withdraws or receives a non-punitive grade (grades that do not count toward graduation) unless either the claimant withdraws because he or she is ordered to active duty; or a situation occurs in which all of the following criteria are met: (i) there are mitigating circumstances; and (ii) the claimant or service member submits a description of the mitigating circumstances in writing to VA within one year from the date VA notifies the claimant or service member that he or she must submit a description of the mitigating circumstances, or at a later date if the claimant or service member is able to show good cause why the one-year time limit should be extended to the date on which he or she submitted the description of the mitigating circumstances; and (iii) the claimant or service member submits evidence supporting the existence of mitigating circumstances within one year of the date that evidence is requested by VA, or at a later date if the claimant or service member is able to show good cause why the one-year time limit should be extended to the date on which he or she submitted the evidence supporting the existence of mitigating circumstances. 38 U.S.C. §§ 3034, 3680; 38 C.F.R. § 21.7139. Examples of qualifying mitigating circumstances include: illness of the individual or his family; family death; an unavoidable geographical transfer resulting from the individual's employment; an unavoidable change in employment conditions; immediate family or financial obligations beyond the individual's control that require him to suspend pursuit of the program of education in order to obtain employment; discontinuance of the course by the school; unanticipated active duty for training; or unanticipated child-care difficulties. 38 C.F.R. § 21.7020. As pertinent here, the Veteran enrolled in the Pacific Coast Trade School for the term of April 18, 2016 to March 23, 2017. He was paid tuition, housing, and books and supplies for the term. On September 12, 2016, the Veteran took a leave of absence from his coursework citing interference with his education because of his service-connected mental health disability. He returned to his coursework on December 1, 2016. In October 2016, the VA Debt Management Center (DMC) sent the Veteran three letters notifying him of overpayments of educational benefits in the total amount of $10,387.40. The Veteran disagreed with the validity of the debt and requested a waiver of the overpayment. Specifically, the Veteran asserted that he had not withdrawn from his course, but instead had taken an approved leave of absence. He further asserted that he continued his coursework after his December 2016 return through the end of the term, and he did not think he should be responsible for the overpayment attributed to that portion of the term. The evidence of record reflects that Pacific Coast Trade School certified the Veteran's enrollment for 20 credit hours for the school term beginning April 18, 2016 to March 23, 2017. The total tuition cost for this term was $14,975.00, or $748.75 per credit hour. While the school monthly progress report of record does detail the hours the Veteran attended his education program per week throughout the course term from April 2016 to December 2016, it does not detail how credit hours were divided during the term from April 2016 to March 2017. The enrollment summary from VA reflects the hour type was clock (non-standard). Assuming that the term credit hours were distributed evenly into 50 weeks of instruction throughout the term from April 18, 2016 to March 23, 2017, roughly every 2.5 weeks of instruction counted as one credit hour. Using the school's progress report of the Veteran's course attendance during the semester, the Board finds that the Veteran missed 11 weeks of instruction from April 18, 2016 to December 15, 2016. Based on the Veteran's competent and credible statements, the Board finds that the Veteran attended the roughly 11 weeks of instruction left in his term following his return from leave of absence from January 2017 to March 23, 2017. As the Veteran attended 39 weeks of instruction from April 18, 2016 to March 23, 2017, he attended 15.6 credit hours which totaled $11,680.50. As he was paid $14,975.00 for the semester, that creates an overpayment of $3,295.00 for tuition expenses. The Board notes that the Veteran's educational institution was issued a notice of disapproval from the Accrediting Commission of Career Schools and Colleges in September 2016 following the June 2016 probational status of the institution. A school memorandum dated September 26, 2016 reflects that all students of Pacific Coast Trade School who were currently enrolled as of August 8, 2016 would continue to receive VA educational funds until the completion of their program but that future students would be ineligible for VA educational assistance. While the Board notes that the Agency of Original Jurisdiction (AOJ) found the Veteran had an overpayment of $8,512.57, the Board finds that this amount does not consider that the Veteran attended the remainder of his term from December 1, 2016 to March 23, 2017. Indeed, the October 2019 Supplemental Statement of the Case (SSOC) of record confirmed the tuition overpayment amount of $8,512.57 with the rationale that even if the Veteran had returned to his program in December 2016, as the program was no longer an approved program by the VA, he was responsible for the tuition payment made from December 2016 to March 2017. This would be correct if the education program recognized that the Veteran had withdrawn from his course or had unsatisfactory attendance and had subsequently attempted to re-enter the program in December 2016. In this regard, the Board is aware that no educational assistance will be paid for any enrollment in a course that is not approved by a State Approving Agency (SAA). 38 U.S.C. §§ 3034, 3672; 38 C.F.R. § 21.7122 (a), 21.7220. However, in the instant case, the Veteran began his term in an approved course which was disapproved in the middle of the Veteran's term. The tuition monies had already been paid to Pacific Coast Trade School for the April 2016 term while it was an approved program, and the Board finds that there is no legal support to require reimbursement which would create an overpayment for tuition already paid in this situation. Further, no tuition was paid to the institution on the Veteran's behalf following the program's SAA, and subsequent VA, disallowance. The evidence of record as a whole supports that the Veteran took a leave of absence, which his school was aware of and approved as a leave of absence rather than a withdrawal, and that he continued his coursework through December 2016 to March 2017. No notice from the educational institution details the Veteran was at any time withdrawn from his course or in an unsatisfactory attendance status. As such, the Board finds that any overpayments created by VA for the portion of the Veteran's term from December 1, 2016 to March 23, 2017 is solely due to VA administrative error, and these debts are not valid. However, while the Veteran was not withdrawn from his course per his educational institution, the Board finds the Veteran was not entitled to be paid benefits for weeks of a course that he was no longer attending. 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 multiple weeks of an educational course that he did not attend. As the Veteran received $3,295.00 of benefits to which he was not entitled, the Board finds that the tuition overpayment amount of $3,295.00 is valid. Similarly, the AOJ found that the Veteran had an overpayment amount of $523.43 for books and supplies. The Veteran was paid a lump sum of $929.60 for books and supplies for the term of April 18, 2016 to March 23, 2017. Over the course of roughly 50 weeks of instruction, the Veteran was paid $18.59 per week of instruction for books and supplies. As the Veteran attended 39 weeks of instruction, he was owed $725.08 total for books and supplies which creates an overpayment of $204.51. The Board finds that the overpayment of $523.43 for books and supplies is invalid, and the overpayment of $204.51 for books and supplies for the term of April 18, 2016 to March 23, 2017 is valid. Finally, the Veteran was paid $2,244.00, or $74.80 a day, for his housing allowance for the period of September 1, 2016 to September 30, 2016. His leave of absence began on September 12, 2016 which created an overpayment of $1,346.40 for the period of September 1, 2016 to September 30, 2016. The Board finds that an overpayment of $1,346.40 for housing allowance is valid. In summary, the Board finds that a debt of $3,295.00 for tuition, a debt of $204.51 for books and supplies, and a debt of $1,346.40 for housing allowance, totalling $4,845.91, for the term of April 18, 2016 to March 23, 2017, was validly created. The Board has considered the Veteran's assertions that his leave of absence was caused by his service-connected disability and as such a mitigating factor as to the creation of overpayment of educational benefits should be considered. However, despite several notification letters sent to the Veteran requesting a statement of mitigating evidence, it does not appear that he submitted any evidence supporting the existence of these circumstances to VA within a year of being notified of the need to communicate reasons for any such leave of absence. Further, while medical treatment records dated September 2016 reflect the Veteran was treated in urgent care, no reason for the visit or explanation of how this visit was related to the Veteran's leave of absence is of record. Accordingly, mitigating circumstances were not demonstrated to the level required by the controlling regulation, resulting in an overpayment of education benefits in this case that was validly created. See 38 C.F.R. §§ 1.962, 21.739(a)(iii). Waiver of Overpayment 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). 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. In making this determination, consideration will be given to the following elements: fault of the debtor, balancing of faults, undue hardship, defeat the purpose, unjust enrichment, and changing position to one's detriment. If there is any indication of fraud, misrepresentation, or bad faith, waiver of a debt is precluded. 38 C.F.R. § 1.965. As noted previously, 38 U.S.C. § 5302(c) and 38 C.F.R. § 1.965(b) indicate that a finding of fraud, misrepresentation, or bad faith precludes a grant of a waiver of recovery of an overpayment. The Committee concluded in its decision on appeal that the facts in this case do not show that the mandatory bars to waiver apply in the present case, and the Board agrees. There is no indication that the Veteran attempted to defraud VA by misrepresenting any relevant facts with respect to his benefits. After reviewing the record, the Board finds that it would not offend the principles of equity and good conscience to require the Veteran to repay the debts of $3,499.51 and $1,346.40, which were deemed valid, above. To that extent, for the reasons below, his request for a waiver for these amounts must be denied. In assessing whether collection of the debt would be against equity and good conscience, the Board finds that the Veteran is at fault in the creation of the debt. Regulations require consideration of whether the actions of the debtor contributed to causing the debt. 38 C.F.R. § 1.965 (a)(1). Here, the Veteran's actions in taking a leave of absence created the debt at issue. Conversely, the Board cannot point to fault by VA in the creation of the debt. After receiving information from the school regarding the Veteran's changes in status during the April 2016 term and prior to the end of term in March 2017, VA adjusted his benefits and an overpayment was calculated. As to the element of undue hardship, the pertinent regulation provides that consideration should be given to whether collection of the indebtedness would deprive the debtor or his family of basic necessities. 38 C.F.R. § 1.965(a)(3). The Veteran submitted a January 2017 Financial Status Report which did not show any specific evidence of deprivation of basic necessities, and the Board does not find repayment would constitute an undue hardship for VA purposes. The Board has also considered whether recovery of the overpayment of the debt in the amounts of $3,499.51 and $1,346.40 would defeat the purpose for which the benefits are intended. In this case, the purpose would not be defeated. The benefits were intended to pay for coursework towards completion of a degree, and the payments for housing allowance and books/supplies were supplementary to this education. As the Veteran did not receive any credit for the coursework not completed during his leave of absence, keeping the benefits would result in the benefits not being used for their intended purpose. The Board again notes the Veteran asserted that he did not intentionally create the debt because he was taking a leave of absence as a result of his service-connected psychiatric disability, and generally he should not be liable for the debt. As previously discussed, the Board finds there is no evidence of record to support the Veteran's assertions, and the leave of absence was taken intentionally. As the Veteran does not dispute that he did not attend 11 weeks of classes, or 4.4 credit hours, a valid debt was created. For the reasons explained above, it is not against equity and good conscience to require that the debt be repaid. Accordingly, the Board finds that the preponderance of the evidence is against the Veteran's claim, and waiver of recovery of the overpayment of VA education benefits in the amounts of $3,499.51 and $1,346.40 is not warranted. See Gilbert v. Derwinski, 1 Vet. App. 49 (1990). As the debt created after December 1, 2016 in the amount of $5,541.49 was not properly created, there is no overpayment, and the issue of a waiver of the recovery of overpayment of educational assistance in the calculated amount of $5,541.49 is moot. Dismissal of the appeal as to this matter is thus warranted. See 38 C.F.R. § 20.101 (d) (granting the Board the authority to determine its own jurisdiction and to dismiss any matter over which it does not have jurisdiction). A. ADAMSON Acting Veterans Law Judge Board of Veterans' Appeals Attorney for the Board N. Peden 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.