[Federal Register Volume 87, Number 24 (Friday, February 4, 2022)]
[Rules and Regulations]
[Pages 6427-6428]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-02305]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 21


Clarification Concerning Tuition and Fees Payment Plans for 
Standard Terms and 85/15 Calculations

AGENCY: Department of Veterans Affairs.

ACTION: Policy interpretation.

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SUMMARY: The Department of Veterans Affairs (VA) provides notice of a 
policy advisory issued on August 31, 2021, by VA's Education Service. 
The policy advisory clarifies and amends VA's previous regulatory 
interpretation of tuition and fees (T&F) payment plans to differentiate 
between types of payment plans. Some payment plans should no longer be 
categorized as institutional support to a student when calculating the 
ratio of ``supported'' to ``non-supported'' students in a program 
pursuant to the 85/15 Rule. While VA is retaining the general rule that 
a student who has a payment plan with an Educational Training Institute 
(ETI) should be considered supported, a student participating in a 
payment plan that meets the criteria set forth in this notice should 
not be considered supported and, instead, should be counted on the non-
supported side of the 85/15 ratio.

DATES: This policy interpretation is applicable from February 4, 2022.

FOR FURTHER INFORMATION CONTACT: Cheryl Amitay, Chief of Policy and 
Regulations Team, Education Service (225), Veterans Benefits 
Administration, Department of Veterans Affairs, 810 Vermont Avenue NW, 
Washington, DC 20420, Telephone: 202-461-9800 (This is not a toll-free 
number).

SUPPLEMENTARY INFORMATION: The 85/15 rule (38 U.S.C. 3680A(d); 38 CFR 
21.4201(a)) prohibits VA from paying educational assistance benefits to 
any new students once ``more than 85 percent of the students enrolled 
in the [program of education] are having all or part of their tuition, 
fees or other charges paid to or for them by the educational 
institution or by the Department of Veterans Affairs'' (38 U.S.C. 
3680A(d)(1)). VA refers to students who receive such institutional or 
VA aid as ``supported'' students. Conversely, no less than 15 percent 
of the students enrolled in the program must be attending without 
having any of their tuition, fees or other charges paid to or for them 
by the educational institution or VA (referred to as non-supported 
students).
    Currently, in accordance with 38 CFR 21.4201, educational 
institutions are

[[Page 6428]]

required to track the percentage of supported and non-supported 
students enrolled in each of their approved programs and to confirm 
their compliance with the required 85/15 percent ratio (38 CFR 
21.4201(e)-(f)). During the time the ratio of supported students to 
non-supported students exceeds 85 percent, no new students can be 
certified to receive VA education benefits for that program (38 CFR 
21.4201(g)(2)). For the 85/15 calculations, new students include 
students returning after a break in enrollment unless the break is 
wholly due to circumstances beyond the student's control (38 CFR 
21.4201(g)(6)). The 85/15 rule allows VA to continue to pay benefits 
for students already enrolled in the program and receiving benefits 
prior to the ratio of supported students exceeding 85 percent of the 
total population enrolled in the program (38 CFR 21.4201(g)(2)).
    A program suspended for violating the 85/15 rule still may retain 
all of its current students. VA beneficiaries already enrolled in the 
program will be allowed to receive benefits for the program as long as 
they remain continuously enrolled, even if the ratio of supported 
students rises above 85 percent. Also, a beneficiary enrolled at an 
educational institution organized on a term, semester or quarter basis 
need not attend summer sessions to maintain continuous enrollment. 
Further, as provided in 38 U.S.C. 3680A(d) and 38 CFR 21.4201, any 
school is permitted to request a waiver from 85/15 reporting. Finally, 
there are exceptions to compliance with the 85/15 rule, such as the 
following:
    <bullet> VA beneficiaries receiving Veteran Readiness and 
Employment (Chapter 31), or Survivors' and Dependents' Educational 
Assistance (Chapter 35) benefits.
    <bullet> Certain types of education and training institutions such 
as high schools, aero clubs, and farm cooperative courses.
    <bullet> Sites approved for on-the-job or apprenticeship training.
    In 2020, the VA Education Service informed schools that a student 
who has a payment plan with an ETI also should be considered supported 
for calculating the 85/15 ratio. After consulting with various partners 
as well as striving to interpret T&F payment plans in a manner which 
balances the best interests of students with the statutory mandate of 
the 85/15 rule, VA amended its guidance regarding payment plans at ETIs 
in a policy advisory issued on August 31, 2021: Clarification 
Concerning Tuition and Fees Payment Plans for Standard Terms and 85/15 
Calculations. The policy set forth in the aforementioned advisory is as 
follows:
    For classifying a student as supported or non-supported on VA form 
22-10215, Statement of Assurance of Compliance with 85/15 Enrollment 
Ratios, a student enrolled in an ETI will be considered to be supported 
by the ETI unless all of the following apply (i.e., if all of the 
following apply the student will be considered non-supported):
    1. The availability and requirements of the payment plan are 
available for review and/or inspection by students, the State approving 
agency and VA (a) on the school's website and (b) in a dated hard copy 
on file at every campus of the ETI.
    2. The ETI T&F payment plan includes the following provisions:
    a. The payment plan is available to any enrolled student who is 
interested in participating.
    b. The payment plan explicitly requires the student to pay the 
outstanding balance by the end of the 85/15 reporting period (academic 
term or calendar quarter) (i.e., the ETI requires the payment plan to 
be paid off in full no later than the end of the term).
    c. The payment plan must be paid in full before students can begin 
training for the next term.
    To reiterate, unless all of the aforementioned conditions are met 
by the ETI and its T&F payment plan, the school's payment plan will 
still be considered a source of institutional support and should still 
be reported on the supported student count side of the 85/15 supported 
to non-supported ratio (i.e., the side that cannot exceed 85%). 
Conversely, if all of the aforementioned apply, the T&F payment plan 
should not be construed as providing institutional support so a student 
participating in one is not to be considered supported and should be 
reported on the non-supported side of the 85/15 ratio (i.e., the side 
that must be at least 15%).
    The 85/15 rule ensures a minimum number of students who are not 
receiving VA funds are willing to pay for the full cost of the program 
to ensure the price of the program responds to the general demands of 
the open market and a minimum number of non-VA beneficiaries find the 
program worthwhile and valuable. VA cannot ensure compliance with the 
85/15 rule nor ensure GI Bill beneficiaries are not being overcharged 
if there is an unpaid balance at the end of the reporting period that 
could subsequently be waived or otherwise written off.

Signing Authority

    Denis McDonough, Secretary of Veterans Affairs, approved this 
document on January 28, 2022 and authorized the undersigned to sign and 
submit the document to the Office of the Federal Register for 
publication 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.
[FR Doc. 2022-02305 Filed 2-3-22; 8:45 am]
BILLING CODE 8320-01-P