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VA Resumes Debt Collection From Benefit Overpayments

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The Department of Veteran Affairs resumes debt collections from Veterans overpaid for education and disability benefits. The debt program was suspended in April 2020 due to the COVID-19 pandemic. Consequently, over 600,000 Veterans will be put on a 36-month repayment plan.  

Veterans who owe the Department of Veteran Affairs will start receiving notifications within the next two weeks. These notifications will consist of information on paying these debts and what financial assistance programs are available. 

VA Resumes Debt Collection With Safety MeasuresVA Resumes Debt Collection

Fortunately, the VA announced that they wouldn’t start deducting those debt payments from monthly benefits until the start of 2022. As a result, this gives Veterans time to prepare for the financial repercussions the deductions may have. 

Since April 2020, about half of the 600,000 Veterans have already made payments. The remaining have made partial payments or have utilized for the repayment plan.

The Department of Veteran Affairs has calculated the amount owed to them totals to about $1.13 billion. 

In a statement, VA officials said they would “continue to provide relief options such as extending repayment plans, waivers, and temporary hardship suspensions during these challenging times. It has been and will remain a priority of the department to work individually with each veteran.”

In addition, officials have said all Veterans who fall under this category will be put in the 36-month repayment plan automatically starting January.

Rare Cases That Could Result In Financial Harm

VA Resumes Debt Collection

In some cases, there are Veterans who have small benefit payouts with large debts. In this situation, the repayment plan could potentially withhold their entire monthly benefit payouts. However, VA officials consider these “rare cases” and are moving to ensure that this will not financially harm any Veteran.  

Additionally. the department will “recoup benefits payouts for education debts to cover the debt instead of instituting an automatic repayment plan.” The reason for this approach is to 

assure student veterans won’t face significant debt after graduation.

Veterans have the option to apply to defer collection action until September 30, 2022. Veterans can also appeal to have their debts reduced or erased.

If you or any Veterans you know have more questions, you can call the VA Debt Management Center at 1 (800) 827-0648.

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James Cooper
James Cooper comes from a long line of Veterans and decided to enlist for the Marine Corps at the ripe age of 18-years-old following in his father's footsteps. Shortly after being medically discharged from the service, James decided to pursue a career in journalism. Having battled with the VA for years himself, he began to study the system and commit his career to help fellow disabled veterans.

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