Bar to Approval

<RULE> DEPARTMENT OF VETERANS AFFAIRS <CFR>38 CFR Part 21</CFR> <RIN>RIN 2900-AQ99</RIN> <SUBJECT>Bar to Approval</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Department of Veterans Affairs. <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Department of Veterans Affairs (VA) is amending 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 Veterans Affairs (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 or that impose a penalty on an individual for failure to meet financial obligations due to a delayed VA payment. VA is also implementing a provision that allows educational institutions to require a claimant using educational benefits to submit certain documents and to pay certain fees or charges if VA delays payment and ultimately pays less than what an educational institution anticipated receiving. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> <E T="03">Effective date:</E> This rule is effective September 18, 2024. <E T="03">Applicability date:</E> The provisions of this final rule shall apply to all terms that began on or after August 1, 2019. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Thomas Alphonso, Assistant Director, Policy and Procedures, Education Service, Department of Veterans Affairs, 810 Vermont Avenue NW, Washington, DC 20420, (202) 461-9800. (This is not a toll-free number.) </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> On February 27, 2023, VA published a proposed rule in the <E T="04">Federal Register</E> at 88 FR 12293 to amend its regulations to require an SAA, or the Secretary of Veterans Affairs when acting as an 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, and to implement other provisions of the Veterans Benefits and Transition Act of 2018, Public Law 115-407. The 60-day comment period ended on April 28, 2023. VA received comments from five commenters in response to the proposed rule. While all commenters expressed some support for this rule, some requested additional information about its provisions or about implementation procedures. Further, some commenters stated that the rulemaking may have adverse effects on stakeholders. The comments are addressed below. In addition, we have included an applicability date in this final rule to conform to 38 U.S.C. 3679(e)(1) and to make clear that we have been applying, and will continue to apply, the statutory requirements reflected in this rule to all terms that began on or after August 1, 2019, and we have also included a technical edit in new 38 CFR 21.4269(d)(1)(i). <HD SOURCE="HD1">Changes to Section 103</HD> One commenter requested that VA clarify changes it is making to section 103 of Public Law 115-407. As we stated in the proposed rule, section 103 added subsection (e) to 38 U.S.C. 3679, among other things, to require an SAA, or VA when acting as an SAA, to disapprove programs of education that do not permit individuals using Chapter 31 or Chapter 33 benefits to attend or participate in courses while awaiting payment from VA, a requirement not previously in the law. The commenter appears to be conflating public laws enacted by Congress and regulations promulgated by agencies such as VA. This rulemaking implements section 103 at 38 CFR 21.4269; VA is not making any changes to section 103 of Public Law 115-407 because VA has no authority to change laws. VA makes no changes to the rule based on this comment. <HD SOURCE="HD1">Release of Financial Aid Funds</HD> One commenter requested clarification regarding the release of a student's financial aid funds while the educational institution awaits tuition and fees payments from VA. Section 3679(e)(1)(B) provides that educational institutions are prohibited from employing policies requiring students to borrow additional funds to pay tuition and fees so the institutions are paid in advance of VA benefit payments while the institutions await VA payments. As the commenter noted, the law does not address educational institutions' obligations with regard to the release of financial aid funds. The use of Federal student financial aid is administered by the Department of Education (ED). Therefore, ED would be in the best position to answer questions concerning the use and release of financial aid funds. VA makes no changes to the rule based on this comment. <HD SOURCE="HD1">Chapter 35 Beneficiary</HD> One commenter requested additional clarification regarding the application of this rulemaking to Chapter 35 recipients. Section 3679(e), as added by section 103 of Public Law 115-407, requires schools to maintain certain policies applicable only to Chapter 31 and 33 beneficiaries. Effective November 30, 2021 (applicable to academic periods beginning August 1, 2022), Public Law 117-68 revised section 3679(e) to require schools to maintain the policies with regard to Chapter 35 beneficiaries as well. VA does not pay tuition and fees to schools under Chapter 35, but instead pays a statutory flat rate directly to Chapter 35 beneficiaries. 38 U.S.C. 3532. Consequently, schools do not need to certify Chapter 35 tuition and fee payments, and students do not need to demonstrate to the school entitlement to Chapter 35 benefits. Thus, regardless of the statutory revision, there are no school policies about restricting Chapter 35 program participation or imposing a penalty for delayed VA payment of Chapter 35 benefits that would be relevant to Chapter 35 beneficiaries. Nonetheless, in light of the statutory revision, we understand the commenter's confusion. Accordingly, to make it clear that the regulatory requirement would in theory apply to Chapter 35 beneficiaries, and for consistency with the authorizing statute, we are adding “chapter 35” in the final rule where applicable. <HD SOURCE="HD1">Enrollment Manager for Eligibility Verification</HD> One commenter requested additional clarification regarding the definition of “certificate of eligibility,” specifically with regard to the newly released VA system Enrollment Manager (EM), a modernized platform used by school certifying officials (SCO), and its role in certifying student enrollments and verifying a students' eligibility for VA education benefits. As we explained in the proposed rule, we interpret section 3679(e)'s reference to “certificate of eligibility” as not referring to a specific VA document that could serve as eligibility documentation but, rather, as referring to any authoritative documentation provided by VA that serves to verify eligibility under Chapter 31 or 33. While EM allows SCOs to access a Chapter 33 student's entitlement information, such access is limited. A student's information is only accessible through EM if the student has allowed such access. Per 38 U.S.C. 3699A(b), a student may elect not to provide their entitlement information to a school through EM. Furthermore, the EM platform does not provide entitlement information for Chapter 31 student beneficiaries. Nonetheless, an SCO's use of EM to verify a student's remaining Chapter 33 benefits is an acceptable form of authoritative documentation for Chapter 33 beneficiaries who have not exercised their right under section 3699A(b) to block the sharing of their information with schools. Thus, we have clarified its acceptability in the final rule at § 21.4269(a)(1). <HD SOURCE="HD1">Administrative Burdens</HD> One commenter described the many benefits of the new rule but expressed a number of concerns, including a potential increase in the administrative burden on both educational institutions and VA. The commenter stated that educational institutions may be required to change or update their policies and that VA would require more funding to ensure educational institutions' compliance with the rule. VA does not believe that there will be increased administrative burdens associated with this rule. SAAs are generally responsible for the approval or disapproval of education and training programs in their respective states. According to VA's internal compliance records, implementation of section 3679(e) has not created an additional administrative burden on SAAs. Since August 1, 2019, the date VA began implementing the statutory provision, no educational institution has been disapproved due to a violation of section 3679(e), and additional Federal funds have not been required to enforce this provision. Also, while educational institutions are required to provide notice to enrolled and prospective students of any information required for certification of students' enrollment in addition to the information enumerated in their online or print catalogs, VA surveyed multiple educational institutions and found that all have an online catalog that can be easily updated with this required notice in approximately two hours, per data provided by these schools. Consequently, we believe that the provisions of this rule do not pose an undue administrative burden on educational institutions. And there would be no additional burden on VA because, as stated, SAAs, rather than VA, are generally responsible for the approval or disapproval of education and training programs. Therefore, VA makes no changes to the rule based on this comment. <HD SOURCE="HD1">Program Options</HD> Two commenters expressed concern that there could be a reduction in the number of educational program options available to Vete ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 31k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━