[Federal Register Volume 62, Number 62 (Tuesday, April 1, 1997)]
[Rules and Regulations]
[Pages 15400-15402]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8140]
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DEPARTMENT OF VETERANS AFFAIRS
38 CFR Part 1
RIN 2900-AF29
Reduction of Debt Through the Performance of Work-Study Services
AGENCY: Department of Veterans Affairs.
ACTION: Final rule.
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SUMMARY: This document adopts as a final rule amendments to the general
regulations of the Department of Veterans Affairs (VA). The amendments
provide that the money payable for performance of work-study services
may be offset against an individual's outstanding debt to the United
States arising from participation in educational and vocational
rehabilitation programs VA administers. The adoption of this change
helps veterans pay outstanding debts to the United States.
EFFECTIVE DATES: May 1, 1997.
FOR FURTHER INFORMATION CONTACT: June C. Schaeffer, Assistant Director
for Policy and Program Administration, Education Service, Veterans
Benefits Administration, Department of Veterans Affairs, 810 Vermont
Ave., NW, Washington, DC 20420 (202) 273-7187.
SUPPLEMENTARY INFORMATION: On August 5, 1996, VA published in the
Federal Register (61 FR 40589) a proposed rule to permit individuals
who have an outstanding debt to the United States arising from
participation in educational and vocational rehabilitation programs VA
administers to liquidate that debt through the performance of work-
study services. The public was given 60 days to submit comments. VA
received no comments.
Accordingly, based on the rationale set forth in the proposed rule
document, we are adopting the provisions of the proposed rule as a
final rule. For the purposes of clarity, the organization of
Sec. 1.929(b) is slightly modified. This final rule also affirms the
information in the proposed rule document concerning the Regulatory
Flexibility Act.
The Catalog of Federal Domestic Assistance numbers for the programs
affected by this final rule are 64.116, 64.117, 64.120, and 64.124.
This final rule also affects the Montgomery GI Bill--Selected Reserve
for which there is no Catalog of Federal Domestic Assistance number.
List of Subjects in 38 CFR Part 1
Administrative practice and procedure, Cemeteries, Claims,
Employment, Flags, Freedom of information, Government contracts,
Government employees, Government property, Inventions and patents,
Investigations, Privacy, Seals and insignia.
Approved: December 23, 1996.
Jesse Brown,
Secretary of Veterans Affairs.
For the reasons set out in the preamble, 38 CFR part 1 is amended
as set forth below.
PART 1--GENERAL PROVISIONS
1. The authority citation for part 1, continues to read as follows:
Authority: 38 U.S.C. 501(a), unless otherwise noted.
[[Page 15401]]
2. Section 1.929 and its authority citations are added under the
undesignated center heading ``STANDARDS FOR COLLECTION OF CLAIMS'' to
read as follows:
Sec. 1.929 Reduction of debt through performance of work-study
services.
(a) Scope. (1) Subject to the provisions of this section VA may
allow an individual to reduce an indebtedness to the United States
through offset of benefits to which the individual becomes entitled by
performance of work-study services under 38 U.S.C. 3485 and 3537 when
the debt arose by virtue of the individual's participation in a
benefits program provided under any of the following:
(i) 38 U.S.C. chapter 30;
(ii) 38 U.S.C. chapter 31;
(iii) 38 U.S.C. chapter 32;
(iv) 38 U.S.C. chapter 34;
(v) 38 U.S.C. chapter 35;
(vi) 38 U.S.C. chapter 36 (other than an education loan provided
under subpart F, part 21 of this title); or
(vii) 10 U.S.C. chapter 1606 (other than an indebtedness arising
from a refund penalty imposed under 10 U.S.C. 16135).
(2) This section shall not apply in any case in which the
individual has a pending request for waiver of the debt under
Secs. 1.950 through 1.970.
(Authority: 38 U.S.C. 3485(e)(1); Pub. L. 102-16)
(b) Selection criteria. (1) If there are more candidates for a
work-study allowance than there are work-study positions available in
the area in which the services are to be performed, VA will give
priority to the candidates who are pursuing a program of education or
rehabilitation.
(2) Only after all candidates in the area described in paragraph
(b)(1) of this section either have been given work-study contracts or
have withdrawn their request for contracts will VA offer contracts to
those who are not pursuing a program of education or rehabilitation and
who wish to reduce their indebtedness through performance of work-study
services.
(3) VA shall not offer a contract to an individual who is receiving
compensation from another source for the work-study services the
individual wishes to perform.
(4) VA shall not offer a contract to an individual if VA determines
that the debt can be collected through other means such as collection
in a lump sum, collection in installments as provided in Sec. 1.917 or
compromise as provided in Sec. 1.918.
(Authority: 38 U.S.C. 3485(e); Pub. L. 102-16)
(c) Utilization. The work-study services to be performed under a
debt-liquidation contract will be limited as follows:
(1) If the individual is concurrently receiving educational
assistance in a program administered by VA, work-study services are
limited to those allowed in the educational program under which the
individual is receiving benefits.
(2) If the individual is not concurrently receiving educational
assistance in a program administered by VA, the individual may perform
only those work-study services and activities which are or were open to
those students receiving a work-study allowance while pursuing a
program of education pursuant to the chapter under which the debt was
incurred.
(Authority: 38 U.S.C. 3485(e); Pub. L. 102-16)
(d) Contract to perform services. (1) The work-study services
performed to reduce indebtedness shall be performed pursuant to a
contract between the individual and VA.
(2) The individual shall perform the work-study services required
by the contract at the place or places designated by VA.
(3) The number of hours of services to be performed under the
contract must be sufficient to enable the individual to become entitled
to a sum large enough to liquidate the debt by offset.
(4) The number of weeks in the contract will not exceed the lesser
of--
(i) The number of weeks of services the individual needs to perform
to liquidate his or her debt; or
(ii) 52.
(5) In determining the number of hours per week and the number of
weeks under paragraphs (d)(3) and (d)(4) of this section necessary to
liquidate the debt, VA will use the amount of the account receivable,
including all accrued interest, administrative costs and marshall fees
outstanding on the date the contract is offered to the individual and
all accrued interest, administrative costs and marshall fees VA
estimates will have become outstanding on the debt on the date the debt
is to be liquidated.
(6) The contract will automatically terminate after the total
amount of the individual's indebtedness described in paragraph (d)(5)
of this section has been recouped, waived, or otherwise liquidated. An
individual performing work-study services under a contract to liquidate
a debt is released from the contract if the debt is liquidated by other
means.
(7) The contract to perform work-study services for the purpose of
liquidating indebtedness will be terminated if:
(i) The individual is liquidating his or her debt under this
section while receiving either an educational assistance allowance for
further pursuit of a program of education or a subsistence allowance
for further pursuit of a program of rehabilitation;
(ii) The individual terminates or reduces the rate of pursuit of
his or her program of education or rehabilitation; and
(iii) The termination or reduction causes an account receivable as
a debt owed by the individual.
(8) VA may terminate the contract at any time the individual fails
to perform the services required by the contract in a satisfactory
manner.
(Authority: 38 U.S.C. 3485(e), 7104(a); Pub. L. 102-16)
(e) Reduction of indebtedness. (1) In return for the individual's
agreement to perform hours of services totaling not more than 40 times
the number of weeks in the contract, VA will reduce the eligible
person's outstanding indebtedness by an amount equal to the higher of--
(i) The hourly minimum wage in effect under section 6(a) of the
Fair Labor Standards Act of 1938 times the number of hours the
individual works; or
(ii) The hourly minimum wage under comparable law of the State in
which the services are performed times the number of hours the
individual works.
(2) VA will reduce the individual's debt by the amount of the money
earned for the performance of work-study services after the completion
of each 50 hours of services (or in the case of any remaining hours
required by the contract, the amount for those hours).
(Authority: 38 U.S.C. 3485(e); Pub. L. 102-16)
(f) Suspension of collections by offset. Notwithstanding the
provisions of Sec. 1.912a, during the period covered by the work-study
debt-liquidation contract with the individual, VA will ordinarily
suspend the collection by offset of a debt described in paragraph
(a)(1) of this section. However, the individual may voluntarily permit
VA to collect part of the debt through offset against other benefits
payable while the individual is performing work-study services. If the
contract is terminated before its scheduled completion date, and the
debt has not been liquidated, collection through offset against other
benefits payable will resume on the date the contract terminates.
(Authority: 38 U.S.C. 3485(e); Pub. L. 102-16)
[[Page 15402]]
(g) Payment for additional hours. (1) If an individual, without
fault on his or her part, performs work-study services for which
payment may not be authorized, including services performed after
termination of the contract, VA will pay the individual at the
applicable hourly minimum wage for such services as the Director of the
VA field station of jurisdiction determines were satisfactorily
performed.
(2) The Director of the VA field station of jurisdiction shall
determine whether the individual was without fault. In making this
decision he or she shall consider all evidence of record and any
additional evidence which the individual wishes to submit.
(Authority: 38 U.S.C. 3485(e); Pub. L. 102-16)
[FR Doc. 97-8140 Filed 3-31-97; 8:45 am]
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