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House panel votes to fix GI Bill payment rules

A House panel has passed a plan to improve the accuracy of Post-9/11 GI Bill payments to schools, after modifying the bill in response to concerns from veterans groups about unintended consequences — including the possibility that a student could be barred from attending school while payments are being calculated.

The bill, HR 2301, is an attempt to cut down on situations in which a student ends up owing money to the Veterans Affairs Department because of an overpayment.

As passed Thursday by the House Veterans’ Affairs Committee’s economic opportunity panel, the bill would stop the current practice of paying full tuition and fees at the start of a term. Instead, a school will send an invoice to VA for payment after the date when a student is allowed to add or drop classes, normally two or three weeks into the start of the term.

This is a change from the original bill introduced by Rep. Marlin Stutzman, R-Ind., the subcommittee chairman, who wanted to wait until the end of the term so VA could pay based on the final number of courses taken.

Both schools and veterans complained that paying at the end of the term could create problems. If VA did not pay the charges before a new term starts, rules at many schools could prohibit student veterans from attending classes.

Stutzman said he doesn’t want that to happen, but he also wants to cut down on errors so that veterans don’t end up owing money. The compromise bill, passed by voice vote and scheduled to be taken up by the full committee next week, calls for early payments that give plenty of time for disagreements to be worked out between VA and schools, he said.

As extra protection, the bill also would prohibit any institution receiving GI Bill payments from charging a late fee or denying enrollment to a student if VA hasn’t paid tuition. There is one exception: A student may be denied enrollment if the payment is being withheld because the student is indebted to the government.

Because of concerns raised by VA, the new payment system would take effect Aug. 1, 2012, rather than this year. Stutzman said VA reported that it needed more time to prepare.