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Adds a new section 3699C to chapter 36 (Subchapter III) of title 38 establishing restoration of entitlement for covered educational assistance, repayment obligations for institutions that received such assistance, an appeals process for repayment determinations, and definitions for terms such as 'covered educational assistance' and 'covered individual'.
Amends the table of sections at the beginning of chapter 36 by inserting a new item for section 3699C after the item relating to section 3699B.
Requires the Department of Veterans Affairs to restore GI Bill and other covered educational entitlements to veterans and other covered recipients when benefit payments were made during periods when an institution was unapproved, committed fraud, or closed. The bill makes institutions responsible for repaying amounts the VA restores, gives the VA authority to recoup restorations from schools found to have committed fraud, and requires the VA to create a separate appeals process for institutions contesting repayment findings.
Add a new section 3699C to 38 U.S.C. Subchapter III titled 'Restoration of entitlement for pursuit of courses or programs of education at certain educational institutions.'
The Secretary shall determine that any payment of covered educational assistance made for a covered individual during a 'covered period' is not charged against that individual's entitlement to the covered educational assistance.
The Secretary shall determine that such payments during a 'covered period' are not counted against the aggregate period limited by section 3695.
Defines 'covered periods' as periods on or after the date of enactment when any of the following occurred: (1) the institution was not approved by a State approving agency or the Secretary (including revoked approval); (2) the Secretary made a final determination that the institution or its owner violated applicable provisions of section 3696; (3) a court found the institution guilty of or liable for fraud; (4) the institution was closed by the Department of Justice for fraud or violation of Federal or State law; or (5) the institution engaged in fraud and then closed.
As a condition of approval of a course or program, the educational institution must agree that if the institution received covered educational assistance for an individual and the Secretary restores some portion of that individual's entitlement, the institution shall repay to the Secretary the amount of that restored portion that the institution received for that individual.
Who is affected and how:
Veterans and covered beneficiaries: Direct positive impact. Eligible veterans and other covered students whose educational benefits were interrupted, denied, or paid improperly because an institution was unapproved, closed, or fraudulent will have those entitlements restored so they can continue education or receive previously withheld benefits.
Educational institutions (including for-profit and other schools): Financial exposure increases. Institutions that were unapproved, closed, or that committed fraud may be required to repay VA-restored amounts. Schools will face an administrative review process and potential recoupment actions, and may need to respond to VA notices, provide records, and defend repayment findings.
Department of Veterans Affairs: Administrative burden increases. VA must implement restoration processes, manage notifications to beneficiaries and institutions, pursue recoupment when appropriate, and establish and operate a separate appeals channel for institutional repayment disputes. This could require staffing, procedural rulemaking, and coordination with other agencies.
Taxpayers and federal budget: Potential costs and recoveries. Restorations to beneficiaries may increase near-term outlays, but the Secretary’s authority to recoup from responsible institutions could offset some costs. If institutions are insolvent or closed, the government may absorb some restorations absent recovery mechanisms.
Consumer protections and higher education oversight: Strengthens protections for student-veterans by prioritizing restoration of benefits and shifting repayment responsibility toward institutions found at fault. It may prompt closer institutional compliance and monitoring, but the details of enforcement and cross-agency coordination are not specified.
Overall, the bill favors quick relief for affected students while creating tools for VA to hold institutions financially accountable; implementation details and budgetary effects depend on VA rulemaking and institutions’ solvency and litigation outcomes.
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Referred to the House Committee on Veterans' Affairs.
Introduced February 14, 2025 by Delia Ramirez · Last progress February 14, 2025
Committee Hearings Held
Referred to the House Committee on Veterans' Affairs.
Introduced in House