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Top VA official sharply criticized for not committing to paying veterans full benefits

"We’d like to know if these people are going to be made whole by that formula and I’m having trouble getting that answer out of you, it sounds like,” one congressman said.
Paul Lawrence, nominee to become Under Secretary for Benefits for the Department of Veterans Affairs, speaks at a Senate Veterans Affairs Hearing on Capitol Hill on April 11, 2018.
Paul Lawrence, then nominee to become under secretary for benefits for the Department of Veterans Affairs, speaks at a Senate hearing in April.Harry Hamburg / AP file

Paul Lawrence, who oversees the Veterans Benefits Administration, came under fire by members of Congress on Thursday over student veterans who will not be paid the correct amount under the Forever GI Bill.

Rep. Nancy Pelosi, D-Calif., who is likely to be the next speaker of the House, accused the VA of "gross negligence" and "a shameful lack of accountability" after NBC News reported Wednesday that the VA would not repay some student veterans who were paid less than they were due under the Forever GI Bill.

Lawrence defended his agency before Congress on Thursday and called the NBC report "misleading," saying that all veterans would be "made whole." However, he later confirmed in a hearing before the House Committee on Veterans Affairs that the agency did not intend to pay veterans based on the Forever GI Bill rates until spring 2020 — and expressed uncertainty whether it would be worthwhile to go back and pay students according to the law’s rates.

The VA has in some cases sent delayed or miscalculated GI Bill benefit payments over the past semester because of computer issues that came up when it tried to implement two sections of the Forever GI Bill involving housing calculations. The law, passed in July 2017, was supposed to take effect Aug. 1, 2018, but the VA announced Wednesday that it would delay the housing allowance changes until December 2019.

Two congressional aides told NBC News that VA officials told them on a call with congressional staffers Wednesday that the agency had decided it would not retroactively repay veterans based on the Forever GI Bill’s rates. A third committee aide confirmed on Thursday morning that VA officials said on the same call that some student veterans would not be repaid "in cases where a veteran should have gotten a higher housing payment due to the location of where they attended classes."

Lawrence referred to NBC News' previous reporting during his opening testimony and said "nothing could be further from the truth." He emphasized that student veterans from the past semester would be paid the correct amount by January.

“Each and every veteran on the post-9/11 GI Bill will be made 100 percent whole retroactively if need be for their housing benefits for this academic year based on the current uncapped DoD rates,” Lawrence said, referring to rates that are calculated differently than those under the Forever GI Bill, “and beginning in spring 2020 we will be in a position to provide veterans with new rates where applicable to meet the law known as the Forever GI Bill.”

His testimony made clear that the agency would use rates for housing benefits that are calculated by the Department of Defense, rather than by the Forever GI Bill. Here's the difference: The Forever GI Bill requires that veterans get housing benefits based on the location of the campus they attend. VA is using the Defense Department's rates, which are based on the location of the college's main campus. In many cases, a school's main campus may be in a college town that has a lower cost of living than a school’s satellite campus in a major city.

So a veteran attending that satellite campus in the major city would still be paid under "the current uncapped DoD rates" based on the main campus' location, which would likely be less than what the Forever GI Bill stipulates.

Members of the committee pressed Lawrence for additional details on whether students would receive retroactive payments in accordance with the Forever GI Bill’s housing calculation between now and December 2019, when the VA expects to implement the new housing allowance.

Lawrence said the VA did not know what the difference in payments could be or how many student veterans would be affected.

“It’s not clear what the differences will be, and that’s what we have to figure out and work with your team to figure out,” he told committee members. “Is all the processing going to end up with one person getting a check for a dollar? We don’t know that yet. It’s not our intention to harm veterans, but it’s also our intention to process the GI Bill effectively and accurately going forward.”

Multiple committee members expressed frustration at not gaining clarity on the retroactive payments that students would "be made whole" as calculated by the Forever GI Bill.

“It sounds to me like you’re leaving yourself some flexibility as to whether to do that or not,” said Rep. Scott Peters, D-Calif., more than an hour into the hearing. “Maybe you’re assessing if it’s worth the trouble to go back and follow the laws as is written, but we’d like to know if these people are going to be made whole by that formula, and I’m having trouble getting that answer out of you, it sounds like.”

Lawrence said it was not his intention to be evasive, but that he did not want to “give you a blanket statement that requires a tremendous amount of activity for no gain.”

As Lawrence reiterated multiple times during the hearing, it is unclear whether going back and “making students whole” under the Forever GI Bill would be worth the effort because they did not know how large or small the payment variations could be and how many veterans would be affected.

“There could be wide-scale variation and we have to go back for exactly the way you described,” he said. “There could be no variation and going back would be energy that is better spent processing claims going forward. That’s the unknown we have to figure out.”

Rep. Phil Roe, R-Tenn., the chairman of the committee, asked Lawrence if the ongoing issues meant that Congress would need to amend the law as it stands, so that VA’s decision to wait to implement the Forever GI Bill housing calculations in December 2019 would be legal.

“The law states what we must do on 1 August,” Roe said, referring to when the Forever GI Bill was implemented. “Like you said, it’s fairly clear what the law states. The question is are we going to follow the law? That’s the question. And if we’re not, then we have to change the law. It’s got to be changed to a different time. Otherwise you’re required by statute to go back and implement [the applicable sections] as stated in the law.”

Lawrence said he was amenable to that, but emphasized that it could be “for potentially not much gain.”

Before the hearing ended, Roe attempted to summarize the confusion about the current law.

“Basically what we did was, just for clarity, we stood up a system that didn’t work and paid people what we had paid them in the past, and we don’t know what we should have paid them,” he said. “Am I correct? That’s pretty much what we did because our IT system didn’t work.”

“Essentially correct,” Lawrence said. “That’s correct.”