NASFAA Joins NACUBO Effort to Halt Implementation of VA Tuition Offset Policy

NASFAA joined NACUBO and 12 other higher education associations in signing onto a letter urging the U.S. Department of Veterans Affairs (VA) to halt the reinstatement of a policy that would offset veteran debts against Post-9/11 G.I. Bill tuition and fee payments.

Currently, VA can recover a debt owed by a veteran from the housing stipend and other payments that go directly to the veteran, but tuition and fee payments funded by VA education benefits have been exempt from debt recoupment since 2009. If the tuition and fee exemption is eliminated, it could expose veterans to greater debt liabilities from not only VA, but from the postsecondary institution from which the tuition and fee payments are recouped.

"We further believe the proposed offset policy violates the faith and intent of the enrollment certification process," according to the letter to VA. "Upon enrolling in an institution of higher education and asking for certification, the veteran student and the institution have an implied contract under which both parties expect that VA education benefits are forthcoming to the extent of the veteran’s eligibility. Institutions hold seats for those veterans because of the expressed commitment both by the student and the VA on behalf of that student. Currently, institutions allow veterans to register and begin attending class before VA payments arrive."

The letter points out that offsetting tuition and fees simply shifts the student’s debt from VA to the school, but this shift may force the student to withdraw, or preclude future registration for classes, if he or she has insufficient funds to cover the new balance. Early withdrawal could also increase the veteran's debt to VA.

VA announced its plan to reinstate the policy in December, but abruptly halted the planned implementation. The VA notice to schools about the planned implementation raises further concerns about VA’s relationship with postsecondary institutions.

"When VA announced plans to resume this offset policy in December 2011, campuses were told they would ‘not receive a letter advising of the debt collection,'" the letter to VA states. "This will result in a flurry of inquiries between the veteran, the school’s student accounts office and certifying official, and probably several offices at VA. More importantly, lack of warning about a pre-existing veteran debt keeps campus certifying officials, financial aid advisors, bursars, and registrars from adequately alerting and advising students about the unexpected shortfall in his or her account."

The letter notes that VA’s strict privacy policies and lack of proper communication with institutions would exacerbate problems created by the offset. NASFAA joins NACUBO in requesting that the VA allow college and university officials to access benefit information, including eligibility, to better serve and advise students of their academic and financial opportunities.

The Secretary of Veteran’s Affairs is expected to make a decision about reinstating the offset policy in time for July 2012 implementation. 

"We fully recognize the fiduciary responsibility VA must uphold in collecting any non-tax debts owed to the federal government by recipients of VA benefits," the letter states. "However, the proposed policy exposes veterans to even greater debt liabilities and unduly stresses the partnership between the federal government and colleges and universities in their mutual goal to provide educational opportunities to our nation's veterans."