What to Do About Your GI Bill or Veterans Education Benefits If Your School Closes

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What to Do About Your GI Bill or Veterans Education Benefits If Your School Closes

If you're a veteran and you just found out your school (or program) is closing, or the U.S. Department of Veterans Affairs (VA) has disapproved it, it can be a confusing and anxiety-filled time. But there is hope, and you have rights, including new rights that just became effective on Aug. 1, 2021.

You may be able to get part or even all of your GI Bill back so that you can start over at a new school. This also covers other VA education benefits, such as VR&E (formally known as Vocational Rehab). This article details how you might go about getting your VA benefits restored, Pell Grants or student loans fixed, and other resources that help you through this challenging experience.

GI Bill Benefits

Two recent laws are on the books that affect your rights, meaning those rights are slightly different based on when your school closed. There are three distinct timeframes that determine what you need to do to apply to have your benefits restored:

1. Aug. 1, 2021, to Sept. 30, 2023. If you attended a school that closed (or if the VA disapproved your program) after Aug. 1, 2021, you may qualify for full restoration of the amount of your benefits that were charged for the entire period you attended the program or school that was closed or disapproved. This is sort of technical, but it means you get your GI Bill (or VR&E or Montgomery GI Bill) back, as if you'd never used any of your GI Bill at the school that closed. (Note that this is scheduled to expire in September 2023 unless Congress extends it.) But to get your GI Bill back, you must meet two conditions:

  • You must have been a current student at the school when it closed or was disapproved, or you must have been enrolled at the school within 120 days prior to its closure or disapproval. In other words, if you dropped out of the school more than 120 days before it closed, you don't get your benefits back.
  • Also, if you transfer any credits from the closed school to a new school, it may affect how much of your benefits are restored. Specifically, if you transfer up to 11 credits, that's OK and you still get your full GI Bill back. But if you transfer 12 or more credits from the closed school to a new one, you won't get any of your benefits restored. That's because Congress assumes you've gotten enough of a benefit from transferring your credits. This difference will mean you should think very carefully about whether you want to transfer credits from the closed school to a new school.

2. Aug. 16, 2017, to Aug. 1, 2021. If you attended a school that was closed or disapproved between Aug. 16, 2017, and Aug. 1, 2021, you can get back the amount of GI Bill (or VR&E or other VA education benefit) from only the term, quarter or semester you were attending when your school closed or was disapproved. This means you get back only that one semester (or term) you were in at the moment the school closed. In order to get back that one term worth of benefits, you must meet two conditions:

  • You must have been a current student at the school when it closed or was disapproved -- or been enrolled within 120 days prior to its closure or disapproval. In other words, if you dropped out of the school more than 120 days before it closed, you don't get your benefits back.
  • Also, you must not have transferred any of your credits to another school.

 

3. Jan. 1, 2015, to Aug. 16, 2017. If you attended a school that was closed or disapproved between Jan. 1, 2015, and Aug. 16, 2017 (a period designed by Congress to help veterans at ITT Tech and Corinthian Colleges), you may qualify for full restoration of the amount of your benefits that were charged for the entire period you attended the program or school that was closed or disapproved. You must meet two conditions:

  • You must have been a current student at the school when it closed or was disapproved -- or been enrolled within 120 days prior to its closure or disapproval. In other words, if you dropped out of the school more than 120 days before it closed, you don't get your benefits back.
  • Also, you must not have transferred any of your credits to another school.

 

These might be confusing at first, but the most important thing to know is that you still have options. And you can apply for restoration of entitlement at any time. We can help you with the forms. You can do an online submission using the "Education Benefit Entitlement Restoration Request Due to School Closure or Withdrawal" form, which can be sent through the "Ask A Question" link under the "Contact Us" section of the GI Bill website. Or you can send a hard-copy letter to:

 

U.S. Department of Veterans Affairs

Muskogee Regional Processing Office

P.O. Box 8888

Muskogee, OK 74402-8888

 

What about your housing money? If your school closed only temporarily because of COVID-19, the VA will continue to pay your benefits through the end of the term or 28 days, whichever comes first. In all cases, you get your monthly housing allowance until the end of the term or 120 days after the program closes.

 

These rights you have are covered by two different laws: School closures (or disapprovals) between August 2021 and September 2023 are covered by Section 1021 of the Johnny Isakson and David P. Roe Veterans Health Care and Benefits Improvement Act of 2020; and school closures or disapprovals between 2015 and 2021 are covered by Section 109 of the Harry W. Colmery Veterans Educational Assistance Act of 2017. These are two laws that we and other veterans organizations fought hard for.

Pell Grants and Federal Student Loans

Aside from GI Bill and VA benefits, you also have rights with your Pell Grants and students loans. You can get your Pell Grants restored as if you'd never gone to school and get your federal student loans erased. You must meet three conditions:

  • You were still enrolled (or on an approved leave of absence) when the school closed, or you were enrolled within 120 or 180 days of the school's closure. The time period depends on the date your loans were issued.
  • You didn't transfer any credits from the closed school to a "comparable program" at a new school.
  • You don't participate in a "teach-out" from your closed school (you'll hear about it from your school) that you complete or are in the process of completing.

 

You should contact the company that services your federal loan to obtain the documents you will need to fill out to cancel your federal loans. There is more information on the U.S. Department of Education's website here, and free help is available from most veterans organizations.

Private Student Loans

It's more difficult to get private student loans canceled or forgiven, but you might be able to get some of them canceled if you were still enrolled (or on an approved leave of absence) when the school closed.

You also should determine whether your state law provides for cancellation of your private loan, although this is very rare. Contact the company that services your private student loans, which may be different from the company that is servicing your federal loans, to get more information about how you can seek cancellation. Depending on the size of your private loans, you may want to talk to an attorney about your options.

Get Money Back from Your State

Some states have student tuition recovery funds that will reimburse you for some of the money you lost when your school closed (including GI Bill, Pell Grants and student loans). Find out what your rights are in your state. For example, California has a generous program so long as you were still enrolled (or on an approved leave of absence) when the school closed or you were enrolled within 120 days of your school's closure and your school was required to be approved or registered by the California Bureau for Private Postsecondary Education.

 

Other Things to Consider

Watch out for scammers. Be very wary of student debt relief companies and online offers of help. All your rights explained here are free of charge. You don't have to pay anyone to get your rights.

Find your records. Make sure you get a complete copy of all your student records in order to ensure you have all the documents you need to establish your eligibility for federal student loan debt relief. You have a right to inspect your student files under the Family Educational Rights and Privacy Act (FERPA) and may request a copy of any documents in your files. Save a copy of your enrollment agreement, your student ledger (a complete financial accounting of all funds paid to the school and amounts you were charged), all documents you signed, any record of your withdrawal or approved leaves of absence, and any emails between you and anyone at the school.

 

Don't rush into a new school. Do not rush into any "teach-out program" and don't rush to transfer credits to a new school. This is an important decision and a big investment -- take the time to decide what is right for you. Remember that if you transfer a certain number of credits to a new school, you might not get back your GI Bill (or VR&E). Many fraudulent for-profit schools will push you to enroll right away. If they are rushing you, they probably don't have your best interest in mind.

Carefully consider the options that are best for you. Research local community college and public colleges. Sometimes, it is worth waiting and applying for these programs, which are often of higher quality than for-profit school programs in which you can enroll immediately. You do not have any immediate obligation to repay your loans. You have at least a six-month grace period on your federal student loans and may ask your private lenders to give you a forbearance while you determine your next steps.

 

Finding out your school or program is coming to a halt does not have to mean your academic journey is also coming to an end. There are many options to take advantage of to overcome this hurdle, as long as you take the time to know what can be done to fix your situation.

There are many advocates fighting hard for you, and who would be willing to give you additional one-on-one support at no cost to you. Reach out for help, and take it one step at a time.

 

-- William Hubbard is vice president for Veterans & Military Policy at Veterans Education Success. Free help for veterans is available at Help@VetsEdSuccess.Org.

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