**CONTENTS**

**CHAPTER 8. OTHER ACTIONS DUE TO SCHOOL NONCOMPLIANCE**

**SUBCHAPTER I. SUMMARY OF POSSIBLE ACTIONS AND IMPLEMENTING PROCEDURES
FOR EACH**

PARAGRAPH PAGE

8.01 General 8-1

8.02 Summary of Possible Actions \[By Director\] 8-\[2\]

8.03 Initial Procedures 8-3

8.04 Notification to SAA and School \[38 CFR 21.4110(e)(1)\] 8-\[4\]

8.05 Notification to \[Education Division Chief\] 8-\[4\]

8.06 Pre-suspension Notice to Claimants Already Enrolled

(38 CFR 21.4110(e)(2))\] 8-4

8.07 Suspension of Benefits 8-5

8.08 Discontinuance and Disapproval 8-\[6\]

8.09 Processing New Enrollment Certifications 8-\[7\]

**SUBCHAPTER II. ACTIONS BY THE**

**COMMITTEE ON EDUCATIONAL ALLOWANCES**

**AND RELATED PROCEDURES**

8.10 Referral to the Committee 8-7

8.11 Committee Membership 8-\[8\]

8.12 Committee Hearings 8-\[8\]

8.13 Action by the \[RPO\] Director 8-\[9\]

8.14 Requests for VACO Review 8-\[10\]

8.15 Notification of Final Decision to Affected Students and Trainees
8-\[10\]

**CHAPTER 8. OTHER ACTIONS DUE TO SCHOOL NONCOMPLIANCE**

**SUBCHAPTER I. SUMMARY OF POSSIBLE ACTIONS AND**

**IMPLEMENTING PROCEDURES FOR EACH**

**8.01 GENERAL**

\[**a. General.\]** This chapter describes certain actions \[RPO
(Regional Processing Office)\] Directors will follow when circumstances
indicate that a school is not complying with statutory or regulatory
requirements for the payment of benefits to persons enrolled in the
school\'s approved courses \[and the SAA (State approving agency) fails
to act or is not authorized to act\]. These actions must be
distinguished from the school liability procedures described in chapter
7. \[The RPOs\] may follow the school liability procedures, if
applicable, concurrently with the procedures detailed in this chapter.

*\[NOTE: This chapter does not apply to the Manila RO (Regional Office)
nor does it apply when VA acts as an SAA in approving courses. See NOTE
1 in paragraph 8.02c.*

**b. Overview of 38 CFR 21.4210(d).** RPO Directors have the authority
to suspend payment to claimants in a course and may disapprove all
further enrollments or reenrollments of claimants wanting to take that
course under certain conditions. These conditions are:

\(1\) If credible evidence based on a substantive pattern of individuals
in that course shows that the course fails to meet one or more course
approval criteria, or

\(2\) If the school has violated one or more of the recordkeeping or
reporting requirements of the law.\]

*NOTE: This chapter does [not]{.underline} cover all points in the
regulations. In this chapter, the terms \"suspension\" and
\"discontinuance\" refer to specific actions provided for in the
regulations listed below. For a discussion of \"suspension\" and
\"discontinuance\" of benefits generally, see part IV, chapter 11. To
fully understand the topics in this chapter, review the following
regulations:*

\[ \]

38 CFR 21.4135(f), (j) and (k) - Discontinuance or Disapproval Dates.

\[38 CFR 21.4210 - Suspension and Disapproval of Education Assistance
Payments and of Enrollments or Reenrollments for pursuit of Approved
Courses.

38 CFR 21.4211 - Composition, Jurisdiction, and Duties of Committee on
Educational Allowances.

38 CFR 21.4212 - Referral to Committee on Educational Allowances.

38 CFR 21.4213 - Notice of Hearing by Committee on Educational
Allowances.

38 CFR 21.4214 - Hearing rules and Procedures for Committee on
Educational Allowances.

38 CFR 21.4215 - Decision of Director of VA Facility of Jurisdiction.

38 CFR 21.4216 - Review of Decision of Director of VA Facility of
Jurisdiction.\]

38 CFR 21.4259(a) \[and (b)\] - Suspension or Disapproval of Courses by
a State approving agency.

38 CFR 21.4259(c) \[and (d)\] - Suspension or Disapproval of Courses
When VA Functions as the SAA.

In this chapter, the term \"school\" includes \"educational
institutions\" as well as \"training establishments\" as those terms are
defined in 38 U.S.C. 3452(c) and (e).

*\[NOTE: These regulations apply to [mass]{.underline} suspensions. An
RPO may deny payment to an [individual]{.underline} (under 38 CFR
21.4210(b)) without any special procedures if the individual\'s course
fails to meet legal requirements. The RPO must provide the usual appeal
rights in such cases. The RPO Director does not need to be involved.\]*

**8.02 SUMMARY OF POSSIBLE ACTIONS \[BY DIRECTOR\]**

\[ \] Subparagraphs a through \[c\] below summarize each type of action
\[the RPO Director may take\] and the required implementing procedures.
The authority of the SAA (or the VA when acting as the SAA) is
summarized in the Notes at the end of this paragraph.

**a. \[Mass Suspension and Disapproval (38 CFR 21.4210(d)(1)).** The
Director may suspend benefits to persons already enrolled in an approved
course and may disapprove all further enrollments or reenrollments of
individuals seeking VA educational assistance for pursuit of the course
when the Director has evidence that there is a [substantial
pattern]{.underline} of veterans, servicemembers, reservists, or
eligible persons enrolled in the course receiving educational assistance
to which they are not entitled because:

\(1\) One or more of the course approval requirements of 38 U.S.C.
chapter 36 are not met. (These include the course approval requirements
specified in 38 CFR 21.4253, 21.4254, 21.4261, 21.4262, 21.4263, and
21.4264); or

\(2\) The educational institution offering the course has violated one
or more of the recordkeeping or reporting requirements of 10 U.S.C.
chapter 1606, or of 38 U.S.C. chapters 30, 32, 34, 35, and 36. These
violations may include, but are not limited to, the following:

\(a\) Willful and knowing submission of false reports or certifications
concerning students or courses of education;

\(b\) Failure to report to VA a veteran's, servicemember's, reservist's,
or eligible person's reduction, discontinuance, or termination of
education or training; or

\(c\) Submission of improper or incorrect reports in such number,
manner, or period of time as to indicate negligence on its part,
including failure to maintain an adequate reporting or recordkeeping
system.

*NOTE: RPO Directors should use their own independent judgment when
determining whether to approve a mass suspension or discontinuance under
paragraph 8.02a.\]*

**b. \[Mass Suspension and Disapproval for Prohibited Assignment of
Benefits (38 CFR 21.4210(d)(2)).** The Director may also suspend
benefits to persons already enrolled in an approved course and may
disapprove all further enrollments or reenrollments of individuals
seeking VA educational assistance for pursuit of the course when the
Director has evidence that one or more prohibited assignments of
benefits have occurred at an educational institution as a result of that
educational institution's policy. This decision may be made regardless
of whether or not there is a substantial pattern of erroneous payments
at the educational institution.\]

**c. \[Other Disapproval of Enrollments (38 CFR 21.4210(d)(3))**

\(1\) The Director may disapprove the enrollment of all claimants not
already enrolled in an educational institution when the Director finds
that the school

\(a\) Has charged or received from veterans, servicemembers, reservists,
or eligible persons an amount for tuition and fees in excess of the
amount similarly circumstanced nonveterans are required to pay for the
same course; or

\(b\) Has instituted a policy or practice with respect to the payment of
tuition, fees, or other charges that substantially denies to veterans,
servicemembers, reservists, or eligible persons the benefits of advance
payment of educational assistance; or

\(c\) Has used erroneous, deceptive, or misleading practices (see
38 CFR 21.4252(h)).

*NOTE 1: When an RPO Director or the Director of the Manila RO functions
for an SAA (see 38 CFR 21.4150(c) through (f)), and is considering
suspension or disapproval of a course, call the Program Administration
Staff at Central Office on (202) 273-7187 or send E-mail to
\"VAVBAWAS/CO/225B\" for instructions.*

*NOTE 2: SAAs can suspend or disapprove courses. If an SAA
[suspends]{.underline} approval (suspensions may not exceed 60 days),
this action has no effect on payment to persons on the rolls. However,
new enrollments may not be approved. If the SAA
[disapproves]{.underline} a course, payments must be discontinued per 38
CFR 21.4135(j).\]*

**8.03 INITIAL PROCEDURES**

The \[ELR (Education Liaison Representative) having jurisdiction over a
school will initially recommend to his or her CELO (Chief Education
Liaison Officer) if VA should consider implementing one of the
procedures listed in paragraph 8.02. The ELR\'s determination will be
based on a review of compliance survey data or other evidence as
described in part X, chapter 7. The CELO will notify the RPO Director\]
of the type of evidence received and recommend action based on that
evidence. The Director will decide if an appropriate procedure should
begin.

*NOTE: \[In this chapter, the following term apply. \"Education
Processing Division\" refers to the staff that processes education at
the RPO. \"Education Division Chief\" is used to refer to the chief of
the Education Processing Division.\]*

**8.04 NOTIFICATION TO SAA AND SCHOOL \[(38 CFR 21.4110(e)(1)**

If an RPO Director contemplates a mass suspension of benefits or
suspending enrollments or reenrollments under 38 CFR 21.4210(d)\], he or
she will issue written notice to both the SAA and the institution
involved. This notice will advise school officials that they are to
correct the identified deficiencies or violations within 60 days, and
that they may ask for an extension. If school officials request more
time to correct the problems, the Director may authorize an extension of
30 days. However, he or she will not give the institution more than a
total of 90 days.

*NOTE: If mass suspension is contemplated, a pre-suspension notice to
each VA student must be provided as described in paragraph 8.06. \[If a
school willfully submitted false, misleading or fraudulent claims or
statements, see*

*38 CFR 21.4210(f).\]*

**8.05 NOTIFICATION TO \[EDUCATION DIVISION CHIEF\]**

a\. Once the \[RPO Director has notified the school and the SAA of a
proposed suspension under 38 CFR 21.4210(e), the CELO also must promptly
notify the Education Division Chief. The CELO\] will do this by a
memorandum citing the impending action and the reasons for that action.

b\. The memorandum will indicate the date of the notices to the school
and the SAA. It will also include a complete listing, in terminal digit
order, of the file numbers of all affected students. The \[CELO\] must
forward this listing to the Education Division Chief\] on the same day
as the letters to the school and the SAA.

*NOTE: The COIN EDU 289, Compliance Survey Listing, is generated by the
Hines Benefit Delivery Center at the end of October, December, and March
of each year (see pt. IX, \[par. 7.05\]). This report contains a listing
of all running awards (type \"A\" master records) at each training
facility with the exception of \[those cases processed outside the BDN
(Benefits Delivery Network) system. (See pt. IV, ch. 12.)\] If a regular
listing does not contain all affected students (e.g., a 100% review of a
facility is conducted during August), a request for a special listing
must be referred to the Director, Education Service (223A) at Central
Office.*

**8.06 PRE-SUSPENSION NOTICE TO CLAIMANTS ALREADY ENROLLED**

**\[(38 CFR 21.4110(e)(2))\]**

\[The Education Processing Division\] will begin issuing
[pre-suspension]{.underline} notices to claimants as described below.
\[The Education Processing Division\] will [not]{.underline} issue such
notices if the \[CELO\] advises that the school has taken adequate
corrective measures.

\[ \]

a\. Under \[38 CFR 21.4210(e)(2), the Education Processing Division\]
will prepare a letter to each claimant informing him or her of the
proposed suspension of benefits. Each letter will include the following:

\(1\) \[That VA intends to suspend payments\] unless the school takes
corrective action;

\(2\) The reasons for the proposed suspension (the reasons should be
explained in general terms); and

\(3\) \[The date when benefits will be suspended or when new enrollments
and reenrollments will be suspended.\]

*NOTE: \[The Education Processing Division\] should [not]{.underline}
include a Notice of Procedural and Appellate Rights with this letter.
This is a [pre‑suspension]{.underline} notice and not a
[final]{.underline} decision. Therefore, an appeal would not be in
order.*

b\. \[The Education Processing Division\] must be sure to send all
required pre-suspension notifications to students at least 30 calendar
days before the final date given to the SAA \[see par. 8.04)\] and the
institution for the correction of violations (i.e., the proposed
effective date of the suspensions).

c\. The end of the 30-day notification period should coincide with the
end of the 60‑day period given the institution and the SAA. If an
affected student does not receive notice timely, \[the Education
Processing Division\] may not suspend payments until a full 30 days have
elapsed from the date of notification.

EXAMPLE 1: The SAA and the school are notified of specific violations on
September 1. In the notice, VA states that it will suspend payments if
corrective action is not taken by October 31. \[The Education Processing
Division\] must notify each affected student of the impending suspension
of benefits no later than October 1. Suspension will take effect on
November 1.

EXAMPLE 2: Same conditions as above except that \[the Education
Processing Division\] does not mail the notices to affected students
until October 5. In this case, suspension cannot legally take effect
until after November 4.

\(1\) If the \[RPO\] Director grants the SAA or the school an extension
of the 60-day period, \[the Education Processing Division\] will issue a
second notice to each affected student. This notice will advise each
student of the new proposed suspension date and the reason for the
change.

\(2\) The \[CELO should keep the \[Education Division Chief\] informed
of all pending actions to avoid delays in notifications to affected
students.

**8.07 SUSPENSION OF BENEFITS**

*NOTE: \[ \] [Suspension may be carried out only after the notification
requirements described in paragraph 8.06 are met]{.underline}.*

**a. Notice.** When VA [suspends]{.underline} payment to any person,
\[the Education Processing Division\] will send written notice of the
suspension to the person \[(38 CFR 21.4210(d))\]. The notice will:

\(1\) State the reasons for the suspension of payments;

\(2\) Notify the person that he or she has the right to a hearing and to
present evidence why payments should not be suspended; and

\(3\) State the effective date of the suspension.

**b. Award Procedures in Mass Suspension Cases.** When suspending
benefits in [mass]{.underline} suspension cases, \[the Education
Processing Division\] must ensure that the suspension date (i.e., the
DLP (date of last payment) shown in \[BDN\] resulting from the
suspension) is [after]{.underline} the end of the 30-day notification
period. For example, if the notification date is October 1, the end of
the 30‑day period would be October 31. In this case, the suspension
should be effective November 1 (i.e., the DLP should be November 1).
Consult the Schedule of Operations for each benefit program (see pt. II,
ch. 1) and the individual \[BDN\] master records (see pt. II, chs. 3-5)
to determine the timing of the suspension actions in \[BDN\] in order to
implement the desired suspension date.

**8.08 DISCONTINUANCE AND DISAPPROVAL**

It is important to distinguish between \"discontinuance\" and
\"disapproval.\" Discontinuance refers to the discontinuance of
benefits. The Committee on Educational Allowances may recommend
discontinuance of benefits under \[38 CFR 21.4211(b)\]. \"Disapproval\"
has two distinct meanings. The Committee on Educational Allowances may
recommend disapproval of the enrollment or reenrollment of VA students

\[(38 CFR 21.4210(d))\]. However, only an SAA (or VA when acting as the
SAA under 38 CFR 21.4259(c)) may disapprove a course.

**a. Notice When Benefits Are Discontinued.** When VA discontinues
payment to any person, \[the Education Processing Division\] will send
written notice of the discontinuance \[whether under 38 CFR 21.4210(b)
or (d))\]. The notice will:

\(1\) State the reasons for the discontinuance of payments;

\(2\) State that the person has the right to a hearing and to present
evidence why payments should not be discontinued;

\(3\) State the effective date of the discontinuance;

\(4\) Provide full appellate rights.

**b. Notice When Course Disapproved or New Enrollments Disapproved.** If
the course is disapproved or new enrollments disapproved, \[the
Education Processing Division\] should provide affected students with
the same type of notice described in subparagraph a above.

**c. Effective Dates.** There are several effective date rules to
consider depending on the circumstances:

\(1\) Discontinuance by VA \[(38 CFR 21.4135(f) and 21.4210(d)\].

\(2\) Disapproval by SAA (38 CFR 21.4135(j) and 21.4259(a)).

\(3\) Disapproval by VA (38 CFR 21.4135(k), \[21.4210(d)\], and
21.4259(c)).

**8.09 PROCESSING NEW ENROLLMENT CERTIFICATIONS**

**a. Before Proposed Suspension Date**

\(1\) \[The Education Processing Division\] may process awards for
certifications of new enrollments and reenrollments received after a
proposed suspension notice has been issued under 38 CFR 21.4210(e)).
Each claimant must be otherwise eligible for payment.

\(2\) Concurrently with any award of benefits made during this period,
\[the Education Processing Division\] should inform each student of the
impending suspension as described in paragraph 8.06a. In mass suspension
cases, the award should not extend beyond the proposed extension date
which has already been established.

\(3\) \[The Education Processing Division\] should maintain control of
these cases by incorporating the names and file numbers of these
students with those previously furnished by the \[CELO\]. (See par.
8.05.)

**b. After Suspension Date.** If VA already has suspended benefit
payments to all students at the school and receives an enrollment
certification for a term beginning before the suspension date, \[the
Education Processing Division\] will award benefits for any period of
enrollment before the suspension date.

\(1\) Fully inform each affected student of the reason benefits have not
been awarded through a later date. Provide the appeal paragraph.

\(2\) Maintain a listing of any such cases for control purposes to
ensure that appropriate final action is taken on each claim after
payments are either discontinued or the suspension is lifted.

**c. After Discontinuance or Disapproval Date.** Based on an enrollment
certification [received]{.underline} after the date of discontinuance of
payments or disapproval of a course, \[the Education Processing
Division\] may award benefits for any training pursued before the
effective date of the discontinuance or disapproval, but will
[not]{.underline} award benefits for any training [after]{.underline}
that date. \[The Education Processing Division\] must inform each
student of the effect of the denial (i.e., whether it is a full or a
partial denial), the reason for the denial, and the evidence which
supported the denial. Include the appeal paragraph in such denial
notices.

**SUBCHAPTER II. ACTIONS BY THE COMMITTEE ON EDUCATIONAL ALLOWANCES AND
RELATED PROCEDURES**

**8.10 REFERRAL TO THE COMMITTEE**

The \[RPO Director\] must refer cases to the station\'s Committee on
Educational Allowances under various circumstances as described in
paragraph 8.02 \[a, b & c. (See 38 CFR 21.4212(a) for the form and
content of the referral and 21.4212(b) for notice requirements to
schools. Schools must reply within 60 days if they wish to appear before
the Committee and be represented at a hearing to be scheduled if
requested.\]

*NOTE: When the 60-day (or 90-day) period for correcting reporting
problems (under \[38 CFR 21.4210(e))\] has passed without the school
having taken satisfactory corrective action, the Director
[must]{.underline} refer the case to the Committee within 2 workdays.*

**8.11 COMMITTEE MEMBERSHIP**

a\. 38 CFR 21.\[4211\] provides for the establishment of a Committee on
Educational Allowances in each \[RPO\].

b\. \[The Director should appoint three individuals to serve on the
Committee, at least one of whom is familiar with the adjudication of
claims administered by VBA.

*NOTE: The Director should not appoint to the Committee a VA employee
whose active participation in the investigation of a school resulted in
referral of such case to the Committee.\]*

c\. The Director shall appoint a chairperson for the Committee. \[ \]

**8.12 COMMITTEE HEARINGS**

When a school has been referred to the Committee on Educational
Allowances, the Committee will convene to consider the evidence. The
Committee will conduct a hearing under the \[hearing rules in 38 CFR
21.4214.\]

a\. \[If the school replies within 60 days that they want to appear
before the Committee, in accordance with 38 CFR 21.4213, the Chairperson
shall notify the school\] in writing by certified mail, of the
following:

\(1\) The date and place of the hearing.

\(2\) \[The matters to be considered (specific violations).\]

\(3\) The opportunity to appear before the Committee in person or by
counsel, to present witnesses, to present arguments or briefs in the
matter, or to submit a written statement before the date of the hearing.

\(4\) \[The complete hearing rules and procedures.

\(5\) The U. S. Government will not bear any of the expenses incurred by
the school resulting from its participation in the hearing, including
the expenses for counsel or witnesses appearing on behalf of the
school.\]

b\. The Committee \[must also publish notice of the hearing in the
Federal Register. This will constitute notice to any interested
individuals, and will indicate that, while such individuals may attend
and observe the hearing, they may not participate unless called as
witnesses by VA or the school. (38 CFR 21.4213(c))

*NOTE: The RPO must prepare this Federal register notice in a specific
format. RPOs should obtain this format using the Internet to access the
National Archives and Records Administration at the Federal Register
Document Drafting Handbook site. This site is as follows:
\"http://www.nara.gov/nara/fedreg/ddhread.html\".\]*

c\. \[The Committee will make a record of the hearing. This is usually
done with a tape recorder. From the record, the Committee will prepare a
written transcript and send copies to the school.

d\. The Committee will also prepare a report under 38 CFR
21.4211(e)(2)(iii) setting forth the recommendations concerning the
question or questions considered. The report will be prepared in the
same format used for a Statement of the Case (see M21‑1, pt. IV, par.
8.08). This report will include a concise resume of the facts. If the
recommendation is not unanimous, both the majority and minority views
and recommendations will be furnished.

e.\] The Committee will provide its recommendations to the Director in
writing no later than 15 calendar days following the last hearing date.

\(1\) The Committee will base its recommendations upon the facts
established by a preponderance of the evidence.

\(2\) When preparing its recommendation, the Committee will accept the
SAA\'s evaluation on certain issues unless it is clearly and
unmistakably established that the requirements of title 38 U.S. Code are
not being met. The issues where the SAA\'s evaluation would normally be
accepted are:

\(a\) The quality and content of the course instruction;

\(b\) The adequacy of instructional equipment, space, and material; or

\(c\) The educational experience and qualifications of directors,
administrators, instructors, and trainers.

**8.13 ACTION BY THE \[RPO\] DIRECTOR**

a\. The Director will act upon the recommendations of the Committee
\[under 38 CFR 21.4215 after receiving their recommendations\].

b\. \[The Director\'s decision will be based on all admissible evidence
of record, including:

\(1\) The recommendation(s) of the Committee;

\(2\) The hearing transcript and the documents admitted in evidence; and

\(3\) The ruling on legal issues referred to appropriate authority.

c\. The decision will clearly describe the evidence and state the facts
on which the decision is based. In the event that the decision differs
from the Committee\'s recommendation(s), the decision will give the
reasons and facts that the Director relied upon in deciding not to
follow the Committee\'s recommendation(s).

d\. If the Committee\'s recommendation is incomplete or the Director
feels that the record should be reopened, the Director will return the
record to the Committee along with his or her written issue for further
action.

e\. If the Director accepts a Committee\'s recommendation that is
adverse to the school, he or she must specify the effective date of each
adverse action in the decision. He or she must then notify the school by
certified mail of this decision. The decision must inform the school
that it has the right to request a further review by the Director of the
Education Service at Central Office. The Director must post a copy of
the decision at the VA facility and publish a copy of the decision in
the Federal Register.\]

**8.14 REQUESTS FOR VACO REVIEW**

a\. A school may request a review by \[the Director of the Education
Service of any adverse decision by an RPO Director. Send the school\'s
request for further administrative review under 38 CFR 21.4216 to the
Director, Education Service (22), 810 Vermont Avenue, NW, Washington,
DC 20420.

b\. The Director of the Education Service will review the record using
the same evidence used by the RPO Director. As the same evidence is
used, this review will not be a new review (\"de novo in nature\") and
Education Service will not hold a second hearing as part of this review.
This review can affirm, reverse, or remand the original decision. For
affirmation or reversals of the original decision, the decision of the
Director of the Education Service will be the final VA decision.
Education Service must provide copies of the review decision and publish
the decision in the same manner as the RPO Director (see 38 CFR
21.4216(c)).\]

**8.15 NOTIFICATION OF FINAL DECISION TO AFFECTED STUDENTS AND
TRAINEES**

a\. When a final decision is made either by the RPO Director or the
Director of the Education Service, \[the Education Processing Division\]
[must]{.underline} notify each affected student or trainee. If the
decision is unfavorable (i.e., results in a denial or termination of
benefits), the notice should provide a full explanation for the decision
and the evidence on which the decision was based. (Notification of a
favorable decision is not required if the student or trainee was not
previously informed of the possibility that benefits would be
discontinued.) \[The Education Processing Division\] should also inform
each student of his or her rights to further education benefits.

b\. Matters involving adjustment in payment of educational or training
assistance allowance to individuals are the responsibility of the \[the
Education Processing Division\]. Any appeal arising out of such an
adjustment, if timely filed, is for the consideration by the Board of
Veterans Appeals.