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When Your School Closes: The Veterans Eligible to Transfer School (VETS) Credit Act

VA education benefits

UPDATE: The VA official site reports that the Veterans Eligible to Transfer Schools (VETS) Credit Act offers an alternatibe application process for those who need to explore their options for restoration of entitlement.

According to VA.gov, “For any covered closure or disapproval after December 27, 2022, you do not need to enroll in a new school prior to applying for restoration of benefits. If you have not yet enrolled in a new program and therefore do not yet know whether you will or will not get 12 or more credits transferred, you simply answer “No” to question 9A on VA Form 22-0989.”

The Department of Veterans Affairs considers this “as your certification that your new school has not granted you 12 or more credit hours for course(s) taken from the closed/disapproved school. You do not have to complete questions 9B, 9C, or 9D” on the application form.

The Veterans Eligible to Transfer School Credit Act was signed into law in December 2022. This legislation was created to help students attending school on the GI Bill and other VA education benefits in cases where the school closes or is disapproved for VA programs.

How the VETS Credit Act Works

The bill addresses a serious issue–before the VETS Credit Act, students using GI Bill or other VA education benefits to pay for school faced a dilemma in cases where the school they chose is closing or has been disapproved under the GI Bill program.

In such cases, those who wanted to transfer less than 12 credits from these schools had to choose between either transferring the credit or having their VA education benefits restored as if they had not taken classes.

The student was forced to choose one or the other. But the VETS Credit Act changes the equation, adding more choices for the student.

Which programs are affected by the VETS Credit Act?

  • Post- 9/11 GI Bill (Chapter 33
  • Montgomery GI Bill – Selected Reserve (Chapter 1606)
  • Post-Vietnam Era Veterans’ Educational Assistance Program (VEAP) (Chapter 32)
  • Montgomery GI Bill (MGIB) (Chapter 30)
  • Survivors’ and Dependents’ Educational Assistance (DEA) Program (Chapter 35)

Learn more: Post 9/11 GI Bill Application Guide

Transferring College Credits Under the VETS Credit Act

The Act pertains specifically to students using one of the programs listed above who are trying to transfer earned college credits after their school announces a shutdown or the institution is no longer participating in the GI Bill program.

The student has the option of transferring any college credits to a new program, assuming the new school accepts them.

But what happens to the student’s GI Bill entitlement? That depends on whether the student chooses to transfer credits from the closing school–and how many.

Under VETS, the VA requires students to choose–and formally declare–whether to transfer credits. The amount you choose helps the VA determine how much GI Bill entitlement to restore.

  • Students transferring less than 12 credits from a closed/disapproved school may qualify to have 100% GI Bill entitlement restored for use at a new school;
  • Students transferring more than 12 credits from the closing/disapproved school are not entitled to have full GI Bill entitlement restored.

When a student certifies in writing with the Department of Veterans Affairs that they are not transferring more than 12 credits, the VA accepts this as proof–this is all that’s required for the VA to accept that the requirement is met.

In return, the Department of Veterans Affairs issues the student a new VA Certificate of Eligibility showing they have been restored to 100% entitlement for their VA education benefit.

Those transferring more than 12 credit hours will not be awarded restoration of 100% entitlement.

While no official source appears to have gone on the record stating such, this legislation seems to imply that where college credit has already been earned and accepted by another college or university, the GI Bill or other VA benefit has not gone to waste and therefore does not need to be restored.

Another clause in the VETS Credit Act removes a previous requirement that a servicemember transferring their Post-9/11 GI Bill entitlement to a dependent indicate a specific amount of time for the transfer to last. Under the new law, you may no longer be required to specify an end date for transferred GI Bill benefits.

How To Apply For GI Bill Restoration

Use VA Form 22-0989 Education Benefit Entitlement Restoration Request Due to School Closure or Withdrawal to apply for restoration of VA education benefits at a school that has permanently closed or had its approval to receive VA benefits withdrawn.

According to VA.gov, the VA can restore entitlement “only for the period of enrollment in which you did not receive credit (or in which you lost training time).

Generally, this means that entitlement can only be restored for the single term you were enrolled in when your program was suspended, your school closed temporarily or permanently, or lost its approval to receive VA benefits”

That said, there are exceptions. VA.gov notes, “For any affected enrollment between August 1, 2021, to September 30, 2023, VA is able to restore entitlement for the entire program of education, not just the last term, quarter or semester if you were not able to transfer at least 12 credits to a new school.”

Claims for this temporary provision must be received after enrollment at the new school and on or before September 30, 2023.

Why the VETS Credit Act was Necessary

Using the GI Bill and related options for college becomes more complicated when your selected school closes. How many credit hours were earned before the closure and will another school accept some or all of those credits? Just as importantly, how much GI Bill entitlement remains to use at a new school?

Anyone who has transferred from one school to another knows that a college isn’t obligated to accept all or even some of your past credits–the college will decide what applies and what does not. In some cases, a student may not transfer credits at all. The VETS Credit Act is designed to help these students make a fresh start where needed.

Learn more: Veteran Education Benefits Guide

Planning Your Next Move

Another way VETS can help? Planning. Not knowing whether you will have full entitlement or only a partial amount (based on your previous school attendance while using the GI Bill) can make budgeting for your college expenses and budget much more difficult.

The Act provides some added certainty in these cases. Knowing you can transfer less than 12 credits to a new institution of higher learning AND get your GI Bill restored to 100% is a lot of peace of mind when planning your next move.

And if you have to find alternative ways to fund your education, you can get a headstart if you already know you need to transfer more than 12 credits from the old school.

Knowing the credits you have already earned may transfer means you didn’t waste your time at the original school–the thought of having to start all over and repeat some of the same classes you took at the other school won’t be a problem should you choose to transfer those credits.

What To Know About the VETS Credit Act

VETS requires you to decide whether to transfer college credits to a new school as part of the VA education benefits restoration process. In some cases the restoration of entitlement may be automatic.

According to VA.gov, if the closure or disapproval happened after August 1, 2021, “to receive restoration of entitlement for your entire program, you must first enroll at a new school or training institution and have them evaluate how much credit they will accept. Once the evaluation is complete, VA can determine how much entitlement may be restored.”

If you aren’t sure how these rules apply to you, contact the VA directly or speak to a school admissions representative.


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.