Detrimental Delays: Reviewing Payment Failures in VA’s Education Programs

VA Budget and ModernizationHouse Veterans' Affairs Subcommittee on Economic Opportunity · December 16, 2025 · 119th Congress
The House Veterans' Affairs Subcommittee on Economic Opportunity held this hearing to examine why up to 75,000 dependents and survivors receiving Chapter 35 education benefits experienced months-long payment delays after VA's August 2025 migration from its legacy Benefits Delivery Network (BDN) to the new Digital GI Bill (DGIB) system, and why Congress and beneficiaries were not informed for months. Begins at ▶ 0:18:59
Transcript
Highlights

Title

VA's Chapter 35 Education Benefit Payment Delays and Failed Communication

Purpose

The House Veterans' Affairs Subcommittee on Economic Opportunity held this hearing to examine why up to 75,000 dependents and survivors receiving Chapter 35 education benefits experienced months-long payment delays after VA's August 2025 migration from its legacy Benefits Delivery Network (BDN) to the new Digital GI Bill (DGIB) system, and why Congress and beneficiaries were not informed for months. Witnesses from VA's Veterans Benefits Administration, contractor Accenture Federal Services, and the survivor advocacy group TAPS testified about the causes of the backlog, the government shutdown's compounding effects, and steps taken to fix the problem before the spring semester. Begins at▶ 0:18:59

Who spoke

• Chairman (Rep. Barrett, presiding)▶ 0:18:59: Opened the hearing on Chapter 35 payment delays affecting up to 75,000 dependents/spouses of deceased, missing, or 100% disabled veterans since August▶ 0:19:56; later questioned witnesses on the certificate-of-eligibility timeline and the manual-reconciliation decision▶ 0:39:29, and pressed on whether VA ran a dry run before implementation▶ 0:44:02.

• Ranking Member Papis▶ 0:22:29: Said this is the first hearing where a Senate-confirmed VA appointee did not testify▶ 0:22:29; called VA's silence "unprecedented," noting VA didn't formally acknowledge the problem until a December 5th briefing despite knowing since September▶ 0:24:18; entered three unanswered committee letters into the record and read a constituent's account of missed rent, child care, and car payments▶ 0:27:03; pressed Develin on who authorized the communication blackout and furlough decisions▶ 0:45:23▶ 0:48:48.

• Ms. Margarita Devlin, Acting Principal Deputy Under Secretary for Benefits, VBA▶ 0:29:18: Testified the August 2025 BDN-to-DGIB migration was technically successful but a 2024 decision requiring manual reconciliation of converted claims "more than doubled" processing time▶ 0:29:40; said a 19% surge in Chapter 35 claims and compressed testing compounded delays▶ 0:31:01; said VA "did not understand the magnitude" of the delays' impact and apologized▶ 1:11:07; reported the fall backlog is now cleared, with only 28 pre-Dec.12 claims pending as of testimony▶ 0:57:15, and automation accuracy at 96% for originals/93% for supplementals▶ 1:06:14.

• Mr. Kenneth Smith, Executive Director, Education Service, VBA▶ 0:42:50: Said the conversion happened August 4, 2025, and by September claims processors reported reconciliation was taking hours, not the anticipated minutes▶ 0:42:50; said VA "immediately" began streamlining and building automation▶ 0:43:19; reported the automation solution launched November 15 resolved issues for over 5,000 students and enabled 1,100+ payments▶ 0:32:28, later processing 3,500 of 6,600 (54%) of one day's claims via automation▶ 0:59:00.

• Mr. Justin Park, Managing Director, Accenture Federal Services▶ 0:34:08: Testified DGIB has processed over 16 million claims delivering $43 billion to 2.3 million beneficiaries, with 55% of claims processed same-day▶ 0:35:25; disputed characterizations of a "system glitch," saying "the system is working as required"▶ 0:36:08; disclosed Accenture has been paid $686 million to date▶ 0:51:12; said requirements for the automation fix were approved September 23 and deployed to production November 15, reconciling roughly 88,000 claims▶ 0:37:53.

• Rep. Hammed▶ 0:49:44: Called the hearing title "detrimental delays" a euphemism for "a breach of contract" with veterans▶ 0:49:44; criticized VA for using "old dusty spreadsheets" despite spending nearly $1 billion on Accenture's contract and $25 million to maintain the legacy mainframe▶ 0:50:13.

• Rep. Ramirez▶ 0:55:10: Noted 4,400 Chapter 35 claims remained unprocessed from fall 2025 as of December 5▶ 0:56:07; asked why Congress wasn't notified once VA knew in September reconciliation was taking 4-6 times longer than planned▶ 0:56:35; got Devlin to confirm October-to-November payments processed rose 56% year-over-year, totaling $238 million disbursed▶ 0:57:15.

• Rep. Kennedy▶ 1:00:18: Focused on broader VA workforce issues, citing a 2024 OIG report on Buffalo VA staffing shortages and consult delays▶ 1:01:32, a leaked memo proposing 80,000 VA layoffs▶ 1:02:20, and an announced plan to cut up to 35,000 health care jobs▶ 1:02:48.

• Rep. Bazinski▶ 1:04:58: Pressed Devlin on whether VA's new "automation-first" strategy risks overcorrecting given past data-integrity concerns▶ 1:05:44; asked whether the deferred resignation/early retirement programs reduced claims-processing capacity, and Devlin confirmed claims processors were excluded from both programs▶ 1:08:23.

• Rep. McGarvey▶ 1:09:14: Argued the delays represent "a complete breakdown of trust," not a mere glitch▶ 1:10:12; pressed Devlin on who was held accountable, to which she responded she could not speak to who made the 2024 decision▶ 1:12:09; asked about VA's plan to avoid scheduling future IT rollouts at the start of a semester▶ 1:13:47.

• Ms. Ashlynne Haycock-Lohmann, Director, Government & Legislative Affairs, TAPS▶ 2:37:44: Testified 168,000 Chapter 35 beneficiaries had delayed fall payments▶ 2:38:07; said the $1,574/month Chapter 35 benefit is less than half the Montgomery GI Bill and dates to a 1956 law▶ 2:38:59; said TAPS learned of the crisis from families and schools, not VA, and has received no VA briefing to date▶ 2:39:52; recommended making the GI Bill hotline essential during shutdowns and resuming monthly stakeholder calls halted since December 2024▶ 2:41:48.

Key moments

• VA's written and oral testimony confirms the manual reconciliation requirement was a 2024 "business decision, not a technical failure," but it "more than doubled" processing time▶ 0:29:40▶ 0:31:01.

• Accenture's Park directly rebutted media reports of a "system glitch," stating "the system is working as required," attributing the backlog to a 19% year-over-year rise in Chapter 35 claims and the manual-reconciliation requirement▶ 0:36:08▶ 0:36:36.

• Papis revealed VA did not formally acknowledge the problem to Congress until a December 5th briefing, despite VA knowing of the issue since September when it sent automation requirements to Accenture — a four-month gap▶ 0:24:18▶ 0:24:48.

• Accenture confirmed it has been paid $686 million to date on the DGIB contract▶ 0:51:12, while Hammed noted VA spent nearly $1 billion on Accenture plus $25 million to keep the legacy mainframe running▶ 0:50:43.

• Devlin acknowledged VA "did not understand the magnitude" of the payment-delay impact on beneficiaries before the shutdown and could not identify who made the original 2024 decision or who was held accountable▶ 0:57:15▶ 1:12:09.

• The automation fix, delayed by the government shutdown, deployed November 15 and reconciled roughly 88,000 claims (per Accenture) / resolved issues for over 5,000 students (per VA)▶ 0:37:53▶ 0:32:28.

• Haycock-Lohmann testified 168,000 Chapter 35 beneficiaries had delayed fall payments — far more than the roughly 900 VA initially told Congress in September — and that TAPS learned of the crisis from families and schools, not VA▶ 2:39:52▶ 2:38:59.

• IT staff needed to test and deploy the fix were furloughed during the shutdown and not recalled until the day before it ended, per Papis, despite mandatory education-benefit programs remaining funded▶ 0:26:39.

• Bazinski got Devlin to confirm claims processors were excluded from deferred resignation and early retirement programs, ruling out staff attrition as a cause of the backlog▶ 1:08:23▶ 1:08:50.

• Papis and McGarvey both pressed for accountability; Devlin repeatedly said she could not identify who made the 2024 manual-reconciliation decision or who bears responsibility▶ 1:12:09▶ 1:12:14.

Metadata

CommitteeHouse Veterans' Affairs Subcommittee on Economic Opportunity
Chamber / CongressHouse · 119th Congress
DateDecember 16, 2025
TypeHearing
Witnesses
Ms. Margarita Devlin — Acting Principal Deputy Undersecretary for Benefits, Veterans Benefits Administration, Department of Veterans Affairs
Mr. Justin Parke — Managing Director, Digital GI Bill Program Manager, Accenture Federal Services
Ms. Ashlynne Haycock-Lohmann — Director, Government & Legislative Affairs, Tragedy Assistance Program for Survivors
Mr. Kenneth Smith — Executive Director at Education Service, Veterans Benefits Administration, Department of Veterans Affairs
Videoyoutube
Transcript238 caption blocks · 13,143 words · 2:56:21 runtime
EventCongress.gov 118757