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To read about additional problems with the GI Bill, click hereRelated story:VA to issue emergency GI Bill checks

WASHINGTON — Mike DeVaughn thought his new GI Bill benefits would let him finish his degree this year without having to worry about finances.

Instead, the Army reservist has racked up hundreds of dollars in debt just one month into the semester, all while waiting for the first payout on his anticipated living stipend.

“I’m stretched thin; I think there’s only about $37 in my checking account now,” said DeVaughn, in his third year at Anne Arundel Community College in Maryland. “They’re telling me now that the payments should be out by Oct. 1. But for now everything I need is going on my credit card.”

He’s not the only one. Delays in payments have left thousands of veterans worrying that the free education promised to them will instead lead to hefty student loans or an early exit from college when bills can’t be paid.

Veterans Affairs officials have sent out about $60 million in tuition payouts and living stipends since Aug. 1. But that covers less than 10 percent of the more than 270,000 veterans who applied for the new education benefits so far this year.

Some of that number are troops and veterans simply preparing their paperwork for a future semester, or making sure they can transfer their benefit to children in the coming years.

But VA Deputy Director of Education Services Lynn Nelson admits that officials aren’t sure exactly how many veterans have enrolled in classes this semester, noting that they won’t have a final count until sometime next month.

That could leave tens of thousands of veterans waiting until November or later for months of back rent and money for books, a situation that support groups worry will bankrupt them or force them out of college.

“We’re asking communities to lend a hand where they can, asking universities to make available emergency loans to [student vets],” said Derek Blumke, executive director of Student Veterans of America. “That’s what we’re down to now.”

Premature celebration

When Congress passed the new GI Bill benefits last summer, it represented the first major overhaul to the education benefits in decades. For any servicemember who served at least three years on active duty since September 2001, the program promises tuition payouts equal to a full four years at their state’s most expensive public school, plus a monthly living stipend and $1,000 for books each year.

Lawmakers and critics of the VA worried for months that the department would not be ready to issue any checks on Aug. 1, the promised start of the new program. But department leaders, after some initial resistance, hired extra claims officers, launched new education outreach programs and promised they’d be ready for the fall semester.

Last month, President Barack Obama and VA secretary Eric Shinseki hosted a celebration of the new GI Bill, touting both the opportunity for veterans and the work done by the VA so far.

But since then, veterans groups said, calls have been flooding into their offices from students complaining of problems getting their money.

Ryan Gallucci, spokesman for AMVETS, said so far no one he knows of has been forced to drop out of classes, but plenty have been forced to take out short-term loans or borrow money from their parents.

“We’ve got veterans who followed the procedure, did everything right and still aren’t seeing any cash,” he said.

35-day wait

VA officials say the problem lies in how they have to process payments. Until a school notifies the department that a veteran is enrolled and attending classes, they can’t issue any checks.

So, even if a veteran began classes on Sept. 1, if the college’s front office didn’t submit the enrollment forms, the VA won’t send out any cash.

“We’re continuing to tell the schools we need those enrollment forms as soon as possible,” Nelson said. “But until then there isn’t much we can do.”

Even with students whose paperwork is in order, the VA averages 35 days to process their claim. Checks are sent in the mail after that, and can take another week to arrive.

Tuition payments themselves haven’t been much of a problem, veterans groups said, because most colleges will defer payments for student vets knowing that they’ll eventually receive the money. But the living stipends aren’t sent out until the end of the month, as payment in arrears for last month’s costs. Whether or not that money arrives, Blumke said, students have to pay their rent.

Keith Wilson, Director of VA’s Education Services, said he’s not satisfied with that timetable, but noted that the start of the fall semester coupled with the launch of the new benefits lead to a tremendous rush of new work for the department.

Wilson emphasized that even if the payments are delayed, veterans will eventually get all the money owed to them. Students whose claims that aren’t processed until November will be entitled to the full book stipend and housing payments dating back to the start of the semester. Still, that could total thousands of dollars in temporary debt for students.

Gallucci said he sympathizes with the enormous responsibility facing the department with the doling out new benefits.

“We were happy to hear them say that they acknowledged there were gaps in communication in all this,” he said. “Unfortunately, that doesn’t really provide any answers for veterans waiting on payments.”

And this week Iraq and Afghanistan Veterans of America released a statement blasting a VA for the GI Bill problems, warning that the department “is increasingly running the risk of losing the confidence of the newest generation of veterans.”

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