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Veterans Affairs Dept. tells Capitol Hill it won't repay underpaid GI Bill benefits recipients

The news conflicts with a promise VA officials made to a House committee earlier this month that it would reimburse those veterans who received less than the full amount they were due.

For weeks, student veterans across the country have raised an alarm about delayed or incorrect GI Bill benefit payments, which the Department of Veterans Affairs has blamed on computer issues.

But on Wednesday, the department told congressional staffers that it would not reimburse those veterans who were paid less than they were owed, two committee aides told NBC News.

The news conflicts with a promise VA officials made to a House committee earlier this month that it would reimburse those veterans who received less than the full amount they were due.

According to the aides, however, the VA said it could not make retroactive payments without auditing its previous education claims, which it said would delay future claims. The aides asked not to be identified because they were not authorized to speak publicly.

NBC News previously reported that some veterans were forced into desperate financial straits stemming from a change in calculating housing allowances under the Forever GI Bill, which President Donald Trump signed into law in July 2017. When its computers were unable to process that change, the VA quickly faced a backlog of veterans’ claims three times higher than normal.

Because of those issues, the VA had announced earlier on Wednesday that it would delay the Forever GI Bill housing allowance changes until December 2019 — and again promised that retroactive payments would be made to those who did not receive a correct amount.

But VA officials told congressional staffers in a telephone call on Wednesday morning that once the system is made right next year, they will not make retroactive payments to those who were underpaid because of the housing miscalculations.

"They are essentially going to ignore the law and say that that change only goes forward from December 2019," one aide told NBC News.

The reason the VA decided that it would not make the retroactive payments is because it would have to audit all its previous education claims prior to December 2019, meaning the VA would potentially have to inspect 2 million claims, the aide said.

VA officials said this could cause further delays in processing future claims, according to the aides, an issue that caused some veterans to suffer earlier this year.

While this decision could mean the agency is flouting the law because it would not provide the correct amount of money to student veterans as required by two sections of the Forever GI Bill, the VA told the congressional staffers that they have a legal justification that would allow them to move forward with this decision.

They did not share that justification, however.

When asked for comment, a VA spokesman did not address the issue directly. Instead he reiterated that the agency would delay paying housing allowances in accordance with the new Forever GI Bill until the spring term of 2020 and instead pay housing allowances based on Department of Defense's older Basic Housing Allowance rates.

Attempting to implement the law would put “an enormous administrative burden for schools in which some 35,000 certifying officials would have to track retroactively and re-certify hundreds of thousands of enrollment documents,” Curtis Cashour, the VA spokesman, said over email.

Cashour also said that students who were overpaid because of the law’s changes or because of issues in implementing the law “will not be held liable for the debt.”

But he did not comment on those who were underpaid and rampant confusion continues to surround the issue, as it is unknown how many students have been underpaid thus far, how many more could be underpaid because of the changes to the law and how much money these veterans are owed.

Congressional aides described the situation as “frustrating.” One, who commented on the shifting answers and constant confusion stemming from VA, asked, “I mean, am I taking crazy pills?”

Under Secretary for Benefits Paul Lawrence is scheduled to testify Thursday morning before the House Committee on Veterans’ Affairs.

One of the committee aides said that members of Congress will attempt to clear this issue up before they move forward with the hearing.

“They need to figure it out,” the aide said.