The Department of Veterans Affairs says it’s made major strides toward implementing an IT system to handle the new, much more complicated version of the G.I. Bill. But members of Congress are hearing that student veterans and the schools they attend still are facing long delays in getting payments.

At issue is the Post-9/11 G.I, bill, a generous educational benefit Congress approved in 2008 for Iraq and Afghanistan-era veterans. Unlike its predecessor, the Montgomery G.I. Bill, which granted essentially the same benefit to every eligible veteran, the 21st century version is vastly more complex: students get direct payments for housing and books, tuition payments go directly to universities, all based on variables such as the student’s home state.

VA so far has spent more than $260 million to build an IT system to automate and speed the complicated claims process. But student veteran groups told the House Veterans Affairs Committee Thursday that at least so far, claims are still anything but speedy.

Hayleigh Perez, an Army veteran, said she arrived at graduate school last year but her G.I. Bill funds had not, despite having sent her claim to VA several months earlier.

“After re-submitting the same documentation I’d sent in November of the previous year, I was told to call back a week later. After calling the VA every week for five weeks, I finally got through the never-ending hold times, and I finally got through to a representative,” Perez said. “She could see all of the documents I’d submitted both times, and within a few minutes, she was able to issue payment for my book stipend, by housing allowance and my tuition certificate.”

Perez, who’s now the vice president of the Student Veterans Advocacy Group, said she wound up getting her payment a few days after that final call. But veterans who were less persistent with the department’s call center and who’ve contacted her group had worse outcomes, she said. She said she’s seen fellow veterans wait two-to-five months to have their claims processed.

Long weeks, waits for some vets

Michael Dakduk, the executive director of Student Veterans of America, said the wait times among the veterans his group serves are shorter: six-to-eight weeks.

But those are long weeks, he said.

“The problem is we can’t see the status of our claims, and our housing allowance comes on the tail end of each month. So you don’t know if you’re going to have to wait six weeks or eight weeks to pay your bills,” he said. “Institutions of higher learning have been pretty understanding about that. But landlords are not as supportive when it comes to paying your rent.”

When Congress created the new benefit, it gave VA very little time to figure out how to administer the incoming flood of claims. The department created short term processes to administer the distribution of the new funding while it implemented what’s known as the Long Term Solution (LTS), which it’s been delivering in increments since then using an agile development methodology in partnership with the Navy’s Space and Naval Warfare Systems Command.

But student groups and schools say until the automated, rules-based system is processing claims on a timely basis, developers need to add what they see as a critical feature: the ability for both schools and students to track their claims in real-time via a online interface, so at a minimum, beneficiaries know what to expect.

In the absence of that situational awareness, schools say they’re willing to cover student veterans’ tuition expenses while they wait for the VA payments to arrive.

But Kim Hall, the Vice President of the National Association of Veterans Program Administrators, said that practice might not last forever. Because of the payment delays, some schools might soon ask veterans to pay for tuition up-front while VA claims work their way through the process.

“It’s probably where we’re going,” she said. “But I wouldn’t say a majority of our schools are asking for that yet. We’re doing our best to float the students until the VA pays.”

The problem, Hall said, is that educational institutions are becoming bogged down with Treasury Department offset actions, owing to VA claims that it’s overpaid a college or university for a given student’s tuition. Those payments, she said, are based on VA calculations that are opaque to the outside world and that schools have no way of tracking in real-time before they arrive, often weeks or months after they’re requested.

If the department ultimately determines it’s paid a school too much, the institution has to repay the funds. And frequently, schools have found the IRS and VA are trying to simultaneously collect the same alleged debt, Hall said.

“The overpayment situation is in a crisis mode,” she said. “Institutions have extended a courtesy to allow veterans to continue attending school as we wait for VA payments to arrive, but we have no way of knowing at the beginning of the term how much we’re going to get for that student’s tuition or fees. That results in overpayments and underpayments, and some schools are into the hundreds of thousands of dollars of debt with the tax offsets. We may have no choice but to ask the students to pay up-front.”

Processing is getting better

Hall said her group is asking VA and the IRS to halt the collections process against schools until the federal government and educational institutions can sort out which of the overpayments are indeed valid. Many of them, she said, arose in 2009 and 2010 when VA was first scrambling to set up the new benefits program.

But VA says 2013 is a different story from three years ago. The long-term solution now is up and running, and the department now is using automated algorithms to process many claims, taking much of the time-intensive manual labor previously required by the claims adjudicators out of the loop. Automation has ramped up significantly since last fall, said Robert Worley, the director of VA’s education service.

“At that time, we were struggling to keep up,” he said. “As we examined that problem, we turned our focus to the types of claims that actually pay our veterans. Since the implementation of the automation, we’ve been able to process the supplemental claims very quickly.”

Last October, VA handled about 25 percent of those supplemental claims through the automated process. The percentage this week is in the mid-40s, Worley said.

Processing time for initial eligibility claims under the new GI bill are averaging around 30 days in processing now, he said. Supplemental claims, the ones that actually generate payments to veterans and schools, now are being turned around and sent to the Treasury Department within about a week on average.

Still, Worley said the VA thinks it’s unacceptable that any veterans are waiting, or have waited for weeks or months to receive their benefits.

As to why it took VA multiple years to ramp up the automation process, Roger Baker, VA’s assistant secretary in the Office of Information and Technology and chief information officer, said there’s a relatively straightforward answer, aside from the system’s sheer size and complexity.

“It’s a very complex set of rules we process in the education system. And there’s a difference between VA and Amazon. If Amazon finds they have a business rule that would make the system a lot harder to operate, they can just change the business rule. If it’s in the law, we don’t have that opportunity,” he said. “We’ve built a system that processes claims according to the law.”

No individual tracking tool

And for now, Baker said, there are no immediate plans to add an online tracking tool for individual claims, despite the clamor from students and schools. It comes down to a competition for funding among VA’s various mission areas, he said.

“As with any IT system, there are many new features and functionalities that users would like to see. That’s as true for LTS as it is for any of the other 1,000-plus IT systems that we operate within the VA,” he said. “Inside VA, we have a disciplined approach to prioritizing IT needs. In 2013, we’ve focused our resources to fully support [Veterans Affairs Secretary Eric Shinseki’s] goal of fully eliminating the disability claims backlog between now and 2015.”

To that end, VA is deploying its paperless Veterans Benefits Management System throughout the country this year after some initial hiccups. But Baker said VA actively is searching for any funding it can free up for other new upgrades in its 2013 IT budget.

In the meantime, he said, the progress VA’s made so far on the G.I. Bill system is a significant achievement in the world of government IT, in that it’s met its objectives so far without overrunning its projected costs.

“During my confirmation in the spring of 2009, I consistently heard that the VA would fail in the implementation of the efforts needed to support this program. I can use the word ‘universal’ for that opinion,” he said. “Under pressure to implement the new G.I. Bill on time, we also had to transform an 8,000-person IT organization so that it could deliver. I’m proud of the results. From a forecast of failure, the VA IT organization delivered the LTS system under tight deadlines.”

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