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Eye Opener: Banks Hold Up Some Veterans Funds

By Ed O'Keefe

Eye Opener

Happy Wednesday! The Department of Veterans Affairs still can't seem to get ahead of some of the problems plaguing the Post 9/11 GI Bill, the program providing veterans, active-duty servicemembers and their dependents money for college tuition, textbooks and related expenses. A backlog forced the department last week to start issuing emergency checks to participants that had not yet received their first payments.

But The Eye reports in Wednesday's Federal Diary column that some banks have placed holds on the checks out of concern about potential fraud.

VA contacted some banks, university officials and program participants over the weekend when it learned of the problem, according to spokeswoman Katie Roberts. Concerned bank employees can call 1-800-827-2166 to speak with a VA employee that will confirm the check's amount and whether it was previously cashed. (Program participants should keep the number handy when they go to the bank with their checks!)

Turns out some of the checks issued by U.S. Bank on behalf of VA were handwritten in order to ensure they had enough checks to quickly distribute the funds, Roberts said. Those checks then raised concerns at some banks.

The department has distributed roughly $70 million in emergency checks since the payments started on Friday, Roberts said. Roughly 30,000 of the 64,000 students enrolled in the Post 9/11 GI Bill are still awaiting payment. The VA is authorizing payment for approximately 3,000 students per day.

VA also announced Tuesday that it will distribute $17 million in grants to community groups in 19 states, the District of Columbia and Puerto Rico to help provide shelter for homeless veterans. The department operates the largest network of homeless assistance programs in the nation and estimates it spent $2.8 billion to provide health care and specialized homeless programs last fiscal year.

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By Ed O'Keefe  | October 7, 2009; 5:54 AM ET
Categories:  Agencies and Departments, Eye Opener  
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