Citation Nr: 22014379 Decision Date: 03/12/22 Archive Date: 03/12/22 DOCKET NO. 15-36 474 DATE: March 12, 2022 ORDER The overpayment of payment of educational assistance benefits under Chapter 33, Title 38, United States Code (known as the Post-9/11 GI Bill), in the amount of $5,277.85, was validly created. Entitlement to waiver of recovery of an overpayment of payment of educational assistance benefits under the Post-9/11 GI Bill, in the amount of $5,277.85, is granted. FINDINGS OF FACT 1. A debt in the amount of $5,277.85 was properly created. 2. There is no indication of fraud, misrepresentation, or bad faith on the part of the appellant in matters involving creation of the debt at issue in this matter. 3. Recovery of the overpayment of Chapter 33 educational assistance benefits in the amount of $5,277.85 would be against equity and good conscience. CONCLUSIONS OF LAW 1. The debt created by the overpayment of Chapter 33 educational assistance benefits in the amount of $5,277.85 for housing allowance benefits is valid. 38 U.S.C. § 5302; 38 C.F.R. § 21.9640. 2. The criteria for waiver of the overpayment of Chapter 33 educational assistance benefits in the amount of $5,277.85 have been met. 38 U.S.C. § 5302; 38 C.F.R. §§ 1.962, 1.963, 1.965. REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veteran served on active duty in the United States Marine Corp from August 1998 to June 2006. This appeal to the Board of Veterans' Appeals (Board) arose from a January 2015 decision of the Department of Veterans Affairs (VA) Debt Management Center's Committee on Waivers and Compromises (COWC) in Buffalo, New York, that denied the Veteran's request for waiver of recovery of an overpayment of housing allowance benefits in the amount of $5,277.85. The Veteran disagreed with the COWC's denial of his waiver request and subsequently perfected an appeal to the Board. A Board hearing was held in July 2021. A transcript is of record. Regarding the claim on appeal, although it does not appear as though the Veteran specifically disagreed with the validity of debt, because the 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), the Board has framed the issue on appeal to include the matter of whether the debt was validly created. Validity of Debt Turning first to whether the debt was validly created, a review of the record reveals that the Veteran was approved for receipt of educational assistance benefits under the Post-9/11 GI Bill and that she was receiving such benefits while attending Drexel University. Drexel University then certified that the Veteran was enrolled for 12 resident credit hours for the period from April 2 through June 15, 2012, and for 14 resident credit hours for the period from September 24 through December 15, 2012. Based on those certifications, the Veteran was awarded Post-9/11 GI Bill benefits, to include a monthly allowance in the amounts of $1,623.00 and $1,758.00, respectively, for each full month of training for the periods from April 2 through June 15, 2012, and from September 24 through December 15, 2012. The record then shows that in July 2014, VA received a VA Form 22-1999B, Notice of Change in Student Status, in which it was indicated that a compliance survey had been conducted, the results of which showed that Drexel had erroneously certified the above credit hours as resident credit hours, as opposed to distance credit hours. The Veteran was informed that due to the adjustment from resident to distance hours, VA had paid her more than she was due, which resulted in an overpayment of monthly housing allowance benefits in the total amount of $5,277.85 for the terms outlined above. Relevant to the instant case, the Board notes that payments of Chapter 33 educational assistance 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. 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. In accordance with the provisions of 38 C.F.R. § 21.9720(a), 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. Further, an individual who is pursuing a program of education at more than one-half time at an institution of higher learning located in the United States may receive, in pertinent part, a monthly housing stipend. 38 C.F.R. § 21.9640. Generally, the monthly housing allowance is the same as the military Basic Allowance for Housing (BAH) for an E-5 with dependents. 38 C.F.R. § 21.9640(b)(1)(ii). The monthly housing allowance is based on the ZIP code for school and increases based on BAH increases are effective August 1 (the beginning date of the academic year). Id. In this regard, the Board notes that although a monthly housing allowance was not previously available in the case of veterans who were pursuing training exclusively online, in January 2011, pursuant to Pub. L. No. 111-377 (the Post 9/11 Veterans Educational Assistance Improvements Act of 2010), 38 U.S.C. § 3313(c)(1)(B) was amended by adding clause (iii) of that section, which provides that "[i]n the case of an individual pursuing a program of education solely through distance learning on more than a half-time basis, a monthly housing stipend equal to 50 percent of the amount payable under clause (ii) if the individual were otherwise entitled to a monthly housing stipend under that clause for pursuit of the program of education. (Notably, the relevant regulation, 38 C.F.R. § 21.9640, has not yet been amended to incorporate the allowance of a monthly housing stipend for online training.) For academic year 2011, beginning on August 1, 2011, the monthly housing allowance when taking courses exclusively online was set at $673.50. https://www.benefits.va.gov/GIBILL/resources/benefits_resources/rates/ch33/ch33rates080114.asp. For academic year 2012, beginning on August 1, 2012, the monthly housing allowance when taking courses exclusively online was set at $684.00. https://www.benefits.va.gov/gibill/resources/benefits_resources/rates/ch33/Ch33rates080112.asp. As noted, however, because the Veteran's credit hours for the periods running from April 2 through June 15, 2012, and from September 24 through December 15, 2012, were incorrectly classified as resident credit hours, the Veteran was paid monthly housing allowances for academic periods in questions in the amounts of $1,623.00 and $1,758.00. Here, the Veteran does not dispute that she was enrolled in an online degree program with Drexel University during the time periods in question and was not physically taking classes at Drexel University. Indeed, during her July 2021 hearing, the Veteran stated that she "an online student" located in Georgia. Accordingly, there is no question that the Veteran's monthly housing allowance for the periods in question should have been paid at the rates set forth above, as opposed to at the rate payable for an E-5 with dependents in Philadelphia, Pennsylvania. 38 U.S.C. § 3313(c)(1)(B)(i), (iii). The Board also finds no error in the AOJ's calculation of the overpayment and the Veteran has not disputed the actual amount in question. As such, the Board finds that the overpayment of Chapter 33 educational assistance benefits in the amount of $5,277.85 was properly created. Waiver Having determined that the debt was validly created, the Board turns to the question of entitlement to a waiver of recovery of the overpayment. The law provides that recovery of an overpayment may be waived if there is no indication of fraud, misrepresentation, or bad faith, on the part of the person or the persons having an interest in obtaining the waiver, and recovery of such indebtedness would be against equity and good conscience. See 38 U.S.C. § 5302(a), (c); 38 C.F.R. §§ 1.962, 1.963. At the outset, the Board finds there to be no indication of fraud, misrepresentation, or bad faith on the part of the Veteran in the creation of the debt. Having found an absence of fraud, misrepresentation, or bad faith, consideration must now be given as to whether recovery of the overpayment would be against equity and good conscience. 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 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) the fault of the debtor, (2) balancing of faults between the debtor and the VA, (3) undue hardship of collection on the debtor, (4) whether collection would defeat the purpose of an existing benefit, (5) whether failure to collect a debt would result in the unjust enrichment of the debtor, and (6) whether the debtor changed positions to his or her detriment in reliance upon a granted VA benefit. 38 U.S.C. § 5302; 38 C.F.R. § 1.965(a); see Ridings v. Brown, 6 Vet. App. 544, 546 (1994). After review of the evidence of record, the Board finds that it would be against the principles of equity and good conscience to require the appellant to repay the debt of $5,277.85. Specifically, the Board cannot conclude that the Veteran was at fault in creating the debt. Indeed, it was the certifying official at Drexel University that erred in certifying the credit hours at issue as resident credit hours as opposed to distance credit hours. Further, although April and September 2012 letters to the Veteran informed the Veteran that Drexel University had certified her credit hours for the terms in question as "residence hours," the Veteran has argued that she did not understand the terminology used and believed that VA's indication that she was certified for zero distance hours meant that she did not travel to attend school. The Board has no reason to doubt the Veteran's credibility in reporting her confusion regarding the terminology used in the April and September 2012 letters. Further, to the extent that the Veteran was later paid a monthly housing allowance at the lower rate, online rate for a school term in 2013, which should have alerted her to the earlier error, the Board points out that the error that led to the creation of the debt had already been committed at that point in time. In other words, any later inaction by the Veteran in not alerting VA to the discrepancy regarding her monthly housing allowance, to the extent any existed, has no bearing on which party was at fault the creation of debt. Here, the Board cannot conclude that the Veteran herself was in any way at fault in the creation of the debt. 38 C.F.R. § 1.965(a)(1). Similarly, the Board finds that while VA was not responsible for the creation of debt, as the error leading to the creation of the debt was the fault of the school certifying official, the Veteran was equally not at fault for the debt creation for the reasons outline previously. 38 C.F.R. § 1.965(a)(2). As neither the Veteran nor VA was at fault, there is no balancing of faults in this case. 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 her family of basic necessities. 38 C.F.R. § 1.965(a)(3). In the instant case, the Board points out that the Veteran has already repaid the debt. During her July 2021 hearing, however, she testified that she made financial sacrifices in order to repay the debt while her appeal was pending because she had just begun working and did not want the debt to negatively impact her credit or her opportunity for career advancement. The Board will thus considered whether past-repayment of the debt resulted in undue hardship. During her July 2021 hearing, the Veteran reported that when she was first notified of the debt, she was not working because she was caring for her young children. She stated that being notified of the debt was unexpected and that she and her husband had to engage in numerous cost saving measures in order to repay the debt so as to ensure that the debt did not impact them negatively going forward. The Veteran reported that she did go back to work after first being notified of the debt, and that although she and her husband were able to provide basic necessities for their family, sacrifices were made. She stated that they did not have excess funds to be able to spend on their children. She further reported that the only reason she was able to pay off the debt was because she went back to work full-time. Again, the Board finds no reason to doubt the Veteran's credibility in reporting the circumstances surrounding her ability to repay the debt. Here, although the Veteran was able to repay the debt, it is clear that the way she was able to do so was for her to take on full-time employment. Although this bolstered her family's financial position, the Veteran was no longer able to be the full-time caregiver for her children. Further, the Veteran reported financial sacrifices in that she was unable to send her children to camps or day school. Ultimately, although it does not appear that repayment of the debt deprived the Veteran and her family of "basic necessities", 38 C.F.R. § 1.965(a)(2), because the Veteran was able to take on employment, the Board finds that when reasonable doubt is resolved in favor of the Veteran, repayment of the debt did cause undue hardship. Indeed, had the Veteran not obtained employment, it is not evident that she would have been able to repay the debt without being deprived of basic necessities. Conversely, obtaining employment meant that she was no longer able to be the sole caregiver for her children. It is not clear from the evidence whether she incurred additional financial obligations as a result of her inability to be the sole caregiver for her young children; nevertheless, the Veteran's credible statements regarding her family's financial situation upon repaying the debt and the sacrifices made leads the Board to find that the Veteran's did incur undue hardship in repaying the debt. See 38 C.F.R. § 1.965(a)(3). The Board must also consider whether the recovery of the overpayment would defeat the purpose for which the benefits were intended. In this regard, the Board points out that, for purposes of the Post-9/11 GI Bill, "one of the basic purposes of the living allowance is to offset the cost of housing away from home." S. Rept. No. 111-346, 111th Cong., 2nd Sess., p. 11. In providing for a living stipend for individuals enrolled more than half-time in a distance learning program, the Committee on Veterans' Affairs (the Committee) acknowledged that, "for some individuals, pursuit of a program of education solely by distance learning may be the only manner available to them and that payment of some portion of the living allowance is appropriate." Id. It was determined, however, that because "most distance learning is pursued from home, the full allowance does not appear supported at this time." Id. Here, although the Veteran received more in housing allowance than which she was due, there is no evidence suggest that the Veteran did not use the funds towards housing costs while she was enrolled in her program of education at Drexel University. Thus, although erroneously granted in retrospect, it cannot be said that the education benefits at issue in this case were not used for their intended purpose. Regarding the fifth element, the facts show that the Veteran was arguably enriched by the overpayment of VA benefits in this case, as she was not incurring additional housing costs away from home. However, this alleged enrichment is tempered by the other factors described above. The final factor that the Board is explicitly required to consider is whether reliance on the benefits resulted in relinquishment of a valuable right or the incurrence of a legal obligation. The Veteran has not contended with any specificity, nor does the evidence show, that she had relinquished a valuable right or incurred a legal obligation in reliance on her monthly housing allowance under the Post-9/11 GI Bill. Overall, the Board concludes that the totality of the evidence weighs in favor of finding that recovery of the overpayment of housing allowance benefits under Chapter 33 in the amount of $5,277.85. Specifically, the Board finds that considerations of equity and good conscience as they pertain to the specific facts of this case dictate a need for reasonableness and moderation in the exercise of the Government's rights. In view of the Board's findings, and affording reasonable doubt in favor of the Veteran, recovery of the $5,277.85 overpayment would be against equity and good conscience. Accordingly, the Veteran's request for waiver is granted. In granting the Veteran's request for waiver in this case, the Board acknowledges that the Veteran has already the debt in this case. However, the law specifically provides that "[i]f waiver is granted, in whole or in part, the debtor has a right to refund of amounts already collected up to the amount waived." 38 C.F.R. § 1.911(c)(2). The Board trusts that the AOJ will take necessary action to refund the Veteran the amount already collected in this case. DONNIE R. HACHEY Veterans Law Judge Board of Veterans' Appeals Attorney for the Board K. Neilson, 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.