Failing or Withdrawing from College Classes on the GI Bill
If you attend school on the GI Bill and fail a class, will you get charged for the GI Bill benefits you used? What about those who withdraw or have an “incomplete” designation on one of their courses?
Failing or Withdrawing from College Classes on the GI Bill
The VA is required to approach you differently if you fail than if you withdraw or have an “incomplete.” If you fail a class, will the VA require you to repay your GI Bill money for that course? Not necessarily. You finished the class and received services. But what about students who withdraw or have “Incomplete” as their grade?
Under federal law, the VA distinguishes between these “punitive” grades (such as an F) and their non-punitive grading equivalents. The difference centers on whether a grade affects a student’s permanent cumulative GPA and counts toward the university’s graduation standards. If the student didn’t get services rendered (the entire class), the VA may ask for the money used to pay for that class to be returned.
The legal authority governing these overpayments is Title 38 of the United States Code, Section 3680(a)(3), which prohibits the VA from paying for any course from which a student withdraws or for which a student receives a grade that does not count toward graduation requirements.
Punitive vs. Non-Punitive Grades
As mentioned above, a punitive grade may factor into the student’s Grade Point Average. The most common punitive grade is an “F,” though it can include any grade that lowers the student’s academic standing on an official transcript. But if you sat for the entire class, your GI Bill benefit was actually used as intended and will not require payback.
Withdrawing will not yield those results and will likely require you to repay part of your GI Bill to the VA, as we discuss below.
Differences Between Failing and Withdrawing
When a student veteran remains enrolled until the final day of a term but fails the class, the VA says the student completed the required period of attendance and, therefore, GI Bill funds for that class have been fully used.
The federal government pays the university for the tuition, and the student gets their Post-9/11 GI Bill Monthly Housing Allowance and book stipend earned during that semester. While the grade damages the student’s academic record, it does not create any financial debt with the federal government, and there is no VA “clawback” of those funds.
A non-punitive grade does not affect cumulative GPA and does not get you closer to graduation. Examples include withdrawal (“W”), a withdrawal passing (“WP”), or a “No Pass” (“NP”) in a pass/fail system.
The university does not penalize the student’s academic standing, but it also signals that no academic work was completed for credit. When a VA School Certifying Official reports a non-punitive grade, the VA determines that the federal benefit was not used for an approved educational program.
Consequently, the VA retroactively cancels benefits for that specific course back to the first day of the academic term. This may create debt across three separate areas:
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Tuition and Fees
The VA requires the university to return tuition money paid for uncompleted credit hours. Once the school returns the funds to the VA, the outstanding balance is shifted to the student’s school account.
Monthly Housing Allowance
If a dropped course reduces a student’s overall training time to below full-time status, the VA retroactively recalculates the housing allowance from the start of the semester, and the veteran is then billed for the overpayment.
Book and Supplies Stipend
The VA issues a debt notice to the student, asking for the portion of the stipend associated with the dropped class. By law, campus officials must report enrollment changes to the VA within 30 days of the modification, which starts the debt-collection process.
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About the author
Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter/editor for Air Force Television News and the Pentagon Channel. His freelance work includes contract work for Motorola, VALoans.com, and Credit Karma. He is co-founder of Dim Art House in Springfield, Illinois, and spends his non-writing time as an abstract painter, independent publisher, and occasional filmmaker.
