(Photo: Krishna Rawat)
Editor’s Note: This article has been updated for our fall newsletter.
A software malfunction and the federal government shutdown have created significant delays for more than 75,000 students who rely on VA education benefits. The issue, first reported by Stars and Stripes, halted automated tuition and housing payments under the VA’s Chapter 35 program, which provides monthly stipends to the dependents and survivors of deceased or fully Disabled Veterans.
The VA confirmed that a new claims management system implemented in August triggered the disruption. Technicians who could fix the software are among those furloughed since the shutdown began on Oct. 1. As a result, claims are being processed manually, extending wait times for students whose October payments have yet to arrive. VA Press Secretary Peter Kasperowicz said the problem might not be fully resolved until late November or December, though all delayed payments will be issued in full once processing resumes.
Chapter 35 beneficiaries receive monthly stipends to help cover the costs of college, trade, or vocational school. Payment rates for the 2025–2026 school year are $1,574 per month for full-time enrollment and $912 for half-time. Students must verify their enrollment each month by email or text to continue receiving funds.
The shutdown also closed key communication services, including the GI Bill hotline, some features of AskVA.Gov, and the School Certifying Officials hotline, cutting off students and families from vital support. Without these resources, those awaiting benefits have few options for updates or assistance. The lack of available counselors further compounded the issue, leaving Chapter 35 students unable to complete certifications, reenroll for the next semester, or make changes to their academic schedules.
In response, The American Legion and other Veterans’ advocacy organizations urged the VA to create a post-shutdown recovery plan to manage the backlog and prevent additional lapses. They argued that even temporary interruptions in educational support can have lasting consequences, especially for families already managing financial challenges.
The VA said it had intended to use overtime pay and automation tools to ensure a smooth rollout of the new system, but could not do so once the shutdown began. Some furloughed employees with claims experience were recalled to assist with manual processing.
Many students are still waiting for payments. The agency maintains that once the system is repaired and staff return, all Chapter 35 benefits owed will be issued. Until then, thousands of dependents and survivors are facing uncertainty about how to cover educational and living expenses amid the fallout.
Author: Rikki Almanza
Rikki is a Web Content Coordinator for the American Legion, Department of California. With a deep-rooted family connection to the military, Rikki is committed to using her skills and knowledge to provide valuable assistance and resources to servicemembers and veterans.
