[Federal Register Volume 88, Number 38 (Monday, February 27, 2023)]
[Proposed Rules]
[Pages 12293-12296]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-03964]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 21

RIN 2900-AQ99


Bar to Approval

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Department of Veterans Affairs (VA) is proposing to amend 
its regulations that govern VA's administration of educational 
assistance programs to implement a provision of the Veterans Benefits 
and Transition Act of 2018, which requires a State Approving Agency 
(SAA), or the Secretary of VA (when acting as the SAA), to disapprove 
programs of education provided by educational institutions that do not 
permit individuals using benefits under certain VA educational 
assistance programs to attend or participate in courses while awaiting 
payment from VA and that impose a penalty on an individual for failure 
to meet financial obligations due to a delayed VA payment. We would 
also implement a provision that would allow educational institutions to 
require a claimant using education benefits to submit certain 
documents. In addition, we would make clear that an educational 
institution may require a claimant to pay certain fees or charges if VA 
delays payment and ultimately pays less than what an educational 
institution anticipated receiving.

DATES: Comments must be received on or before April 28, 2023.

ADDRESSES: Comments must be submitted through www.regulations.gov. 
Except as provided below, comments received before the close of the 
comment period will be available at www.regulations.gov for public 
viewing, inspection, or copying, including any personally identifiable 
or confidential business information that is included in a comment. We 
post the comments received before the close of the comment period on 
the following website as soon as possible after they have been 
received: https://www.regulations.gov. VA will not post on 
Regulations.gov public comments that make threats to individuals or 
institutions or suggest that the commenter will take actions to harm 
the individual. VA encourages individuals not to submit duplicative 
comments. We will post acceptable comments from multiple unique 
commenters even if the content is identical or nearly identical to 
other comments. Any public comment received after the comment period's 
closing date is considered late and will not be considered in the final 
rulemaking.

FOR FURTHER INFORMATION CONTACT: Cheryl A. Amitay, Chief, Policy and 
Regulation Development Staff (225C), Education Service, Department of 
Veterans Affairs, 810 Vermont Avenue NW, Washington, DC 20420, (202) 
461-9800 (This is not a toll-free telephone number).

SUPPLEMENTARY INFORMATION: Prior to August 1, 2019, an educational 
institution could prohibit an individual utilizing educational 
assistance under chapter 31 or chapter 33 of title 38, U.S.C., from 
attending classes if either part or all the claimant's tuition and fees 
had not been paid, even if the delinquent tuition and fee payment was 
due to a delay in VA paying the school. On December 31, 2018, sec. 103 
of the Veterans Benefits and Transition Act of 2018, Public Law 115-
407, added subsection (e) to 38 U.S.C. 3697. Section 3679(e) requires a 
State Approving Agency (SAA), or the Secretary of the Department of 
Veterans Affairs (VA) when acting as a SAA, to disapprove, programs of 
education that do not permit individuals using benefits under either 
chapter 31 or chapter 33 to attend or participate in courses while 
awaiting payment from VA. Specifically, beginning on August 1, 2019, an 
educational institution is prohibited from employing a policy which 
prevents an individual from attending classes or participating in a 
program of education while awaiting payment from VA if the individual 
provides the school with a ``certificate of eligibility.'' In addition, 
an educational institution must not impose any penalty on an individual 
for failure to meet financial obligations due

[[Page 12294]]

to a delayed VA payment under chapter 31 or chapter 33. However, the 
law authorizes VA to waive any of these requirements as considered 
appropriate.
    VA proposes to add 38 CFR 21.4259A to implement these statutory 
provisions. We would make clear in Sec.  21.4259A(a)(1) that an 
educational institution will face disapproval if it does not permit a 
claimant using benefits under chapter 31 or chapter 33 to attend 
courses within their program of education beginning on the date the 
claimant provides the necessary eligibility documentation until the 
earlier of the date VA provides payment to the educational institution 
or 90 days after the date the educational institution certifies its 
tuition and fees charges to VA following receipt of the claimant's 
eligibility documentation.
    Section 103 does not explicitly define ``certificate of 
eligibility'' and does not otherwise refer to any one VA document or 
form that provides eligibility documentation. We interpret the term 
``certificate of eligibility'' as used in sec. 103 as referring to any 
verifiable and authoritative document describing a claimant's 
entitlement to education benefits, to include the amount or percentage 
of benefits and the last date to use the benefits awarded, such as a 
decision or notice of a decision on a claimant's application for 
educational assistance, a letter from VA, an updated award letter from 
VA, a print-out of eligibility (statement of benefits) from e-Benefits, 
or a Statement of Benefits from the Post-9/11 GI Bill Benefits tool.
    In addition, Sec.  21.4259A(a)(2) would make clear that an 
educational institution must ensure that it does not impose any 
penalty, including the assessment of late fees, denial of access to 
classes, libraries, or other institutional facilities, or require a 
claimant using benefits under chapter 31 or chapter 33 to borrow 
additional funds due to the inability to meet his or her financial 
obligations to the institution, as a result of delayed payments of 
educational assistance from VA.
    In Sec.  21.4259A(b), we would define a covered individual for 
purposes of this section as any individual who is entitled to 
educational assistance under 38 U.S.C. chapter 31 or chapter 33. 
Section 21.4259A(c) would contain the authorized provision allowing VA 
to waive any of the requirements regarding the educational 
institutions' responsibilities in Sec.  21.4259A.
    Under new sec. 3679(e)(4), educational institutions would 
nonetheless be permitted to require a claimant using benefits under 
chapter 31 or chapter 33 to take the following actions:
     Submit verifiable and authoritative proof of eligibility 
for entitlement to educational assistance not later than the first day 
of a course of education for which the claimant has indicated he or she 
wishes to use entitlement to educational assistance.
     Submit a written request to use such entitlement.
     Provide additional information necessary to the proper 
certification of enrollment by the educational institution.
    We would include these submissions that an educational institution 
may require in Sec.  21.4259A(d)(1). In addition, in Sec.  
21.4259A(d)(1)(iii), to give notice to students attending an 
educational institution and to facilitate VA's oversight of educational 
institutions' compliance with the law, we would require an educational 
institution to clearly state any requirements for the submission of 
additional information for certifying enrollment in their published 
catalog and would also require approval by the SAA of any requirements 
to submit additional information.
    Section 103(c) further provides that an educational institution may 
collect additional payments or fees from a claimant in an amount that 
is the difference between the amount owed and the amount VA paid if the 
claimant is unable to meet his or her financial obligations to the 
institution because of delayed payments of educational assistance from 
VA under chapter 31 or chapter 33 and the amount that VA eventually 
pays is less than what the educational institution anticipated 
receiving. Thus, when a claimant is not entitled to payment of the full 
amount of tuition, but the educational institution anticipated 
receiving full tuition, the educational institution may collect the 
difference between the amount VA has paid to the educational 
institution on the claimant's behalf and the total amount owed by the 
claimant to the educational institution. We would implement this 
requirement in Sec.  21.4259A(d)(2).
    We interpret the permissibility of allowing a school to collect the 
additional payment in cases when VA does not ultimately pay the amount 
the educational institution anticipates receiving as indicating 
Congress' intent to allow a school to require a claimant to pay fees or 
charges that VA does not ordinarily pay in any event. VA ordinarily 
pays subsistence, tuition, fees, and other educational costs. See 38 
U.S.C. 3313(a); see also 38 CFR 21.9620 (noting tuition and fees are 
payable). VA does not ordinarily pay for room and board and certain 
optional fees. According to 38 CFR 21.9505, ``fees'' means ``any 
mandatory charges (other than tuition, room, and board) that are 
applied by the institution of higher learning for pursuit of an 
approved program of education.'' Also, according to Sec.  21.9505, 
``fees do not include those charged for a study abroad course(s) unless 
the course(s) is a mandatory requirement for completion of the approved 
program of education.'' On the other hand, pursuant to Sec.  21.9505, 
payable fees include, but are not limited to, health premiums, freshman 
fees, graduation fees, and lab fees. Therefore, for example, if a 
claimant is living in a dormitory, section 3679(e) does not prohibit 
the school from following its standard procedures for charging and 
collecting payment (including assessing late fees or penalties) for 
dormitory fees. Another example is that the school is not prohibited 
from charging and collecting optional fees such as for parking permits. 
However, the school is prohibited from charging the claimant for 
mandatory freshman fees, health premiums, graduation fees, or lab fees, 
or assessing late fees due to VA's delayed payment of these mandatory 
fees. We would make clear in Sec.  21.4259A(d)(2)(i) that a school 
would not be prohibited from requiring a claimant to pay fees or 
charges that VA does not ordinarily pay, and in Sec.  
21.4259A(d)(2)(ii), that a school may use standard debt collection 
policies for collecting these fees.

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, and other advantages; distributive impacts; 
and equity). Executive Order 13563 (Improving Regulation and Regulatory 
Review) emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
The Office of Information and Regulatory Affairs has determined that 
this proposed rule is not a significant regulatory action under 
Executive Order 12866. The Regulatory Impact Analysis associated with 
this rulemaking can be found as a supporting document at 
www.regulations.gov.

Regulatory Flexibility Act

    The Secretary of Veterans Affairs hereby certifies that this 
proposed

[[Page 12295]]

regulatory action would not have a significant economic impact on a 
substantial number of small entities as they are defined in the 
Regulatory Flexibility Act, 5 U.S.C. 601-612. Although this proposed 
rule includes provisions that entail costs to training institutions, 
such as the loss of late fees that institutions are prohibited from 
assessing when a student is unable to meet financial obligations to the 
institution, and the cost of publication of the requirements for 
submitting additional information needed for certifying enrollment, the 
provisions merely restate existing provisions of statute, and thus will 
have no additional impact on such small entities. Therefore, under 5 
U.S.C. 605(b), this proposed rule is exempt from the initial and final 
regulatory flexibility analysis requirements of 5 U.S.C. 603 and 604.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any one year. This proposed rule would have no such 
effect on State, local, and tribal governments, or on the private 
sector.

Paperwork Reduction Act

    This proposed rule includes a provision constituting a new 
collection of information under the Paperwork Reduction Act of 1995 (44 
U.S.C. 3501-3521) that requires approval by the Office of Management 
and Budget (OMB). Accordingly, under 44 U.S.C. 3507(d), VA has 
submitted a copy of this rulemaking action to OMB for review.
    OMB assigns control numbers to collections of information it 
approves. VA may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. Proposed 38 CFR 21.4259A contains a 
collection of information under the Paperwork Reduction Act of 1995. If 
OMB does not approve the collection of information as requested, VA 
will immediately remove the provision containing a collection of 
information or take such other action as is directed by OMB.
    Comments on the new collection of information contained in this 
rulemaking should be submitted through HYPERLINK ``https://www.regulations.gov/''. Comments should indicate that they are 
submitted in response to ``RIN 2900-AQ99; Bar To Approval'' and should 
be sent within 60 days of publication of this rulemaking. The 
collection of information associated with this rulemaking can be viewed 
at: HYPERLINK ``https://www.reginfo.gov/public/do/PRAMain''.
    OMB is required to make a decision concerning the collection of 
information contained in this proposed rule between 30 and 60 days 
after publication of this document in the Federal Register. Therefore, 
a comment to OMB is best assured of having its full effect if OMB 
receives it within 30 days of publication. This does not affect the 
deadline for the public to comment on the proposed rule.
    The Department considers comments by the public on proposed 
collections of information in--
     Evaluating whether the proposed collection of information 
is necessary for the proper performance of the functions of the 
Department, including whether the information will have practical 
utility;
     Evaluating the accuracy of the Department's estimate of 
the burden of the proposed collection of information, including the 
validity of the methodology and assumptions used;
     Enhancing the quality, usefulness, and clarity of the 
information to be collected; and
     Minimizing the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology, e.g., permitting 
electronic submission of responses.
    The collection of information contained in 38 CFR 21.4259A is 
described immediately following this paragraph, under its respective 
title.
    Title: Publishing of Requirement to Submit Additional Information 
Necessary for Certification of Enrollment.
    OMB Control No.: 2900-xxxx.
    CFR Provision: 38 CFR 21.4259A(d)(1)(iii).
     Summary of collection of information: This new collection 
of information in proposed Sec.  21.4259(d)(1)(iii) would require 
educational institutions to give notice to enrolled and potential 
students of any information in addition to the information already 
enumerated in their catalogs that the educational institution requires 
for certification of claimants' enrollment. The educational 
institutions would be required to publish any additional information, 
after it is approved by the SAA, in their online or print catalogs.
     Description of need for information and proposed use of 
information: The information collected will be used by VA to facilitate 
VA's oversight of educational institutions and to ensure their 
compliance with Sec.  21.4259A.
     Description of likely respondents: Educational 
institutions.
     Estimated total number of respondents: 16,084 educational 
institutions.
     Estimated frequency of responses: Once.
     Estimated average burden per response: Two hours or less.
     Estimated total annual reporting and recordkeeping burden: 
VA estimates the total annual reporting and recordkeeping burden to be 
32,168 burden hours. Using the annual number of responses, VA estimates 
a total annual reporting and recordkeeping burden of 32,168 hours for 
respondents.
     Estimated cost to respondents per year: VA estimates the 
annual cost to respondents to be $901,025.68 (16,084 respondents per 
year x 2 hours per application x $28.01*).
    * To estimate the total information collection burden cost, VA used 
the Bureau of Labor Statistics (BLS) median hourly wage for ``all 
occupations'' of $28.01 per hour. This information is available at: 
https://www.bls.gov/oes/current/oes_nat.htm#00-0000.

Assistance Listing

    The Assistance Listing numbers and titles for the programs affected 
by this document are 64.027, Post-9/11 Veterans Educational Assistance; 
64.028, Post-9/11 Veterans Educational Assistance; 64.032, Montgomery 
GI Bill Selected Reserve; Reserve Educational Assistance Program; 
64.117, Survivors and Dependents Educational Assistance; 64.120, Post-
Vietnam Era Veterans' Educational Assistance; 64.124, All-Volunteer 
Force Educational Assistance.

List of Subjects in 38 CFR Part 21

    Administrative practice and procedure, Armed forces, Claims, 
Colleges and universities, Education, Employment, Reporting and 
recordkeeping requirements, Schools, Veterans, Vocational education, 
Vocational rehabilitation.

Signing Authority

    Denis McDonough, Secretary of Veterans Affairs, approved this 
document on February 21, 2023, and authorized the undersigned to sign 
and submit the document to the Office of the Federal Register for 
publication

[[Page 12296]]

electronically as an official document of the Department of Veterans 
Affairs.

Luvenia Potts,
Regulation Development Coordinator, Office of Regulation Policy & 
Management, Office of General Counsel, Department of Veterans Affairs.

    For the reasons stated in the preamble, the Department of Veterans 
Affairs proposes to amend 38 CFR part 21 as set forth below:

PART 21--VOCATIONAL REHABILITATION AND EDUCATION

Subpart D--Administration of Educational Assistance Programs

0
1. The authority citation for part 21, subpart D continues to read as 
follows:

    Authority: 10 U.S.C. 2141 note, ch. 1606; 38 U.S.C. 501(a), chs. 
30, 32, 33, 34, 35, 36, and as noted in specific sections.

0
2. Add Sec.  21.4259A to read as follows:


Sec.  21.4259A  Bar to approval.

    (a) Beginning on August 1, 2019, a State approving agency, or the 
Secretary when acting in the role of the State approving agency, shall 
disapprove a program of education provided by an educational 
institution that has in effect a policy that is inconsistent with any 
of the following:
    (1) A policy that permits any covered individual to attend or 
participate in the program of education during the period beginning on 
the date on which the individual provides to the educational 
institution any verifiable and authoritative VA document demonstrating 
entitlement to educational assistance under 38 U.S.C. chapter 31 or 
chapter 33 (such as a decision or notice of decision on entitlement, 
letter from VA, updated award letter from VA, print-out of eligibility 
(statement of benefits) from e-Benefits, or Statement of Benefits from 
the Post-9/11 GI Bill Benefits tool) and ending on the earlier of the 
following dates:
    (i) The date on which payment from VA is made to the institution.
    (ii) The date that is 90 days after the date on which the 
educational institution certifies tuition and fees following receipt of 
the verifiable and authoritative VA document proving entitlement to 
educational assistance under 38 U.S.C. chapter 31 or chapter 33.
    (2) A policy that ensures an educational institution will not 
impose any penalty, including the assessment of late fees, the denial 
of access to classes, libraries, or other institutional facilities, or 
the requirement that a covered individual borrow additional funds, on 
any covered individual because of the individual's inability to meet 
his or her financial obligations to the institution due to the delayed 
disbursement of a payment to be provided by VA under 38 U.S.C. chapter 
31 or chapter 33.
    (b) For purposes of this section, a covered individual is any 
individual who is entitled to educational assistance under 38 U.S.C. 
chapter 31 or chapter 33.
    (c) The Secretary (or designee) may waive such requirements of 
paragraph (a) of this section as the Secretary (or designee) considers 
appropriate.
    (d) It shall not be inconsistent with a policy described in 
paragraph (a) of this section for an educational institution:
    (1) To require a covered individual to take the following 
additional actions:
    (i) Submit any verifiable and authoritative VA document to prove 
entitlement to educational assistance under 38 U.S.C. chapter 31 or 
chapter 33 not later than the first day of a program of education for 
which the individual has indicated the individual wishes to use the 
individual's entitlement to educational assistance.
    (ii) Submit a written request to use such entitlement.
    (iii) Provide additional information necessary to the proper 
certification of enrollment by the educational institution. If an 
educational institution intends to require additional information 
necessary for proper certification of enrollment, any such requirement 
must be included in the school's published catalog and also must be 
approved by the State approving agency, or the Secretary when acting in 
the role of the State approving agency, as being necessary for proper 
certification and not overly burdensome to submit.
    (2) In a case in which a covered individual is unable to meet a 
financial obligation to an educational institution due to the delayed 
disbursement of a payment to be provided by VA under 38 U.S.C. chapter 
31 or chapter 33 and the amount of such disbursement is less than the 
educational institution anticipated, to require additional payment of 
or impose a fee for the amount that is the difference between the 
amount of the financial obligation and the amount of the disbursement.
    (i) Such additional payment may include the amount of a financial 
obligation associated with charges for which VA does not pay benefits 
(e.g., room and board, any portion of tuition for which a claimant does 
not qualify).
    (ii) An educational institution may utilize its standard debt 
collection policies for these amounts, including the assessment of late 
fees.

(Authority: 38 U.S.C. 3697(e))

[FR Doc. 2023-03964 Filed 2-24-23; 8:45 am]
BILLING CODE 8320-01-P