Rule2025-21242
Extending Deadline for Debtor To Request a Waiver
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 26, 2025
Effective
January 26, 2026
Issuing agencies
Veterans Affairs Department
Abstract
The Department of Veterans Affairs (VA) is finalizing, with technical changes, a proposed rule to amend the time period that a debtor has to request a waiver from 180 days to one year, as mandated by the Cleland Dole Act. Generally, VA is authorized to not recover debts related to benefits payments or overpayments where recovery would be against good conscience and an application for relief is made within the required time period. Allowing an additional six months to request a waiver reduces pressure on veterans by easing the compliance burden.
Full Text
<html>
<head>
<title>Federal Register, Volume 90 Issue 226 (Wednesday, November 26, 2025)</title>
</head>
<body><pre>
[Federal Register Volume 90, Number 226 (Wednesday, November 26, 2025)]
[Rules and Regulations]
[Pages 54234-54236]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-21242]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF VETERANS AFFAIRS
38 CFR Part 1
[Docket No. VA-2024-OTHER-0024]
RIN 2900-AS18
Extending Deadline for Debtor To Request a Waiver
AGENCY: Department of Veterans Affairs.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department of Veterans Affairs (VA) is finalizing, with
technical changes, a proposed rule to amend the time period that a
debtor has to request a waiver from 180 days to one year, as mandated
by the Cleland Dole Act. Generally, VA is authorized to not recover
debts related to benefits payments or overpayments where recovery would
be against good conscience and an application for relief is made within
the required time period. Allowing an additional six months to request
a waiver reduces pressure on veterans by easing the compliance burden.
DATES: This rule is effective on January 26, 2026.
FOR FURTHER INFORMATION CONTACT: Jeremiah Mcintosh, Systems and
Procedures Analyst, Office of Finance, Office of Management, (207) 402-
9017.
SUPPLEMENTARY INFORMATION: On November 8, 2024, VA published a proposed
rule in the Federal Register, 89 FR 88686, to amend the time period
that a debtor has to request a waiver from 180 days to one year
consistent with section 254 of the Cleland Dole Act, Public Law 117-
328, Division U, which went into effect on December 29, 2024. VA
provided a 60-day comment period, which ended on January 7, 2025. VA
received one supportive comment, which also contained a request that
was outside the scope of the rulemaking. VA is not making any changes
to the final regulation based on this comment. For the reasons stated
above, VA will adopt the proposed rule as final, with technical
changes.
Technical Changes Not Related to Comments
Currently, 38 CFR 1.963(b)(1) establishes a two-year timeframe for
individuals to submit a request for waiver from indebtedness for VA
notices of indebtedness issued by VA on or before March 31, 1983,
without any exception to extend this timeframe. This two-year timeframe
was consistent with 38 U.S.C. 5302(a), prior to such statute being
amended to substitute ``180 days'' for the former ``two years,'' and to
newly include an exception to extend the 180-day timeframe if an
individual could show their receipt of VA's notice was delayed. See
Public Law 97-306, sec. 407(b), enacted Oct. 14, 1982, effective March
31, 1983.
Subject to this statutory amendment, VA promulgated Sec.
1.963(b)(2) on June 15, 1983, establishing a new timeframe of 180 days
from the date of VA notice for those notices issued by VA after March
31, 1983, and including a new exception to extend that timeframe. 48 FR
27400. At the time that VA first promulgated Sec. 1.963(b)(2), this
new 180-day timeframe overlapped the former two-year timeframe in Sec.
1.963(b)(1), and so VA retained paragraph (b)(1) to ensure that the
former, longer timeframe had adequate time to run. However, paragraph
(b)(1) is now obsolete as the former two-year timeframe for notices of
indebtedness issued by VA on or prior to March 31, 1983, has long since
passed, and there is no statutory exception to extend that two-year
timeframe for such notices. VA therefore removes paragraph (b)(1) of
Sec. 1.963 in this final rule. In so doing, VA will now only regulate
applicable timeframes for individuals to submit requests for waivers of
indebtedness in a single paragraph (b) under Sec. 1.963.
VA proposed to revise Sec. 1.963(b)(1) to replace the former 180-
day timeframe with one year for all notices issued by VA after April 1,
1983, so that application of waiver can be ``made within one year
following the date of a notice of indebtedness issued on or after April
1, 1983, by the Department of Veterans Affairs to the debtor.'' 89 FR
88687. This proposed revision was based on amendments to 38 U.S.C.
[[Page 54235]]
5302(a)(1) as made by section 254 of the Joseph Maxwell Cleland and
Robert Joseph Dole Memorial Veterans Benefits and Health Care
Improvement Act of 2022 (Div. U of Pub. L. 117-328, enacted December
29, 2022, hereinafter referred to as ``the Act''). However, section 254
of the Act amended 38 U.S.C. 5302(a)(1) to establish a one-year
timeframe to apply for waiver only for notices of indebtedness issued
by VA on and after December 29, 2024, not to any notice issued by VA on
or after April 1, 1983, as stated in the proposed rule. Any notice
issued by VA from April 1, 1983, through December 28, 2024, would
technically still be subject to the former 180-day timeframe in section
5302(a)(1), prior to the most recent amendment to that statute as made
by section 254 of the Act (albeit, that former 180-day timeframe lapsed
on June 26, 2025, for any notice of indebtedness issued by VA as late
as December 28, 2024).
Although the proposed rule did not distinguish the two timeframes
for waiver requests based on the effective date of the change made to
38 U.S.C. 5302(a)(1) by section 254 of the Act, the former timeframe of
180 days for notices of indebtedness issued by VA from April 1, 1983,
through December 28, 2024, is not relevant. That 180-day timeframe
would have lapsed on June 26, 2025, for any notice of indebtedness that
VA could have issued as late as December 28, 2024. We acknowledge that
38 U.S.C. 5302(a)(1) provides an exception to extend the 180-day
timeframe if an individual could show their receipt of VA's notice was
delayed. However, as of the date of publication of this final rule, VA
does not have knowledge that any individual issued a notice by VA as
late as December 28, 2024, has otherwise submitted proof to VA that
their receipt of VA's notice was delayed in accordance with the current
regulatory language in Sec. 1.963(b)(2), that ``as a result of an
error by either the Department of Veterans Affairs or the postal
authorities, or due to other circumstances beyond the debtor's control,
there was a delay in such individual's receipt of the notification of
indebtedness beyond the time customarily required for mailing
(including forwarding).'' There would therefore be no risk to VA in
publishing a final rule without any date(s) of VA notice otherwise
referenced in 38 CFR 1.963(b).
This final rule therefore makes changes from the proposed rule to
remove paragraph (b)(1) from Sec. 1.963, and renumber and revise Sec.
1.963(b)(2) as proposed to be a new paragraph (b) that retains the
current one-year statutory timeframe in 38 U.S.C. 5302(a)(1) to submit
a request for waiver, but removes the reference to notices of
indebtedness by VA issued on or after April 1, 1983.
Executive Orders 12866, 13563, and 14192
VA examined the impact of this rulemaking as required by Executive
Orders 12866 (Sept. 30, 1993) and 13563 (Jan. 18, 2011), which direct
agencies to assess all costs and benefits of available regulatory
alternatives and, if regulation is necessary, to select regulatory
approaches that maximize net benefits. A regulatory impact analysis
must be prepared for major rules with effects of $100 million or more
in any one year. The Office of Information and Regulatory Affairs has
determined that this rulemaking is a significant regulatory action
under section 3(f)(1) of Executive Order 12866, as supplemented by
Executive Order 13563. This final rule is a deregulatory action under
Executive Order 14192 because it reduces pressure on veterans by easing
the compliance burden associated with debt waivers by allowing an
additional six months to request a waiver. The Regulatory Impact
Analysis associated with this rulemaking can be found as a supporting
document at <a href="http://www.regulations.gov">www.regulations.gov</a>.
Regulatory Flexibility Act (RFA)
The Secretary hereby certifies that this final rule will not have a
significant economic impact on a substantial number of small entities
as they are defined in the Regulatory Flexibility Act (5 U.S.C. 601-
612). The factual basis for this certification is based on the fact
that the final rule only affects individual veteran debtors, not small
entities. In addition, the final rule gives debtors more time to
request a waiver which will not have a negative economic impact on the
debtors. Therefore, pursuant to 5 U.S.C. 605(b), the initial and final
regulatory flexibility analysis requirements of 5 U.S.C. 603 and 604 do
not apply.
Unfunded Mandates
This final rule will not result in the expenditure by State, local,
and Tribal governments, in the aggregate, or by the private sector, of
$100 million or more (adjusted annually for inflation) in any one year.
Paperwork Reduction Act (PRA)
This rulemaking contains no provisions constituting a collection of
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3521).
Congressional Review Act
This rule may result in an annual effect on the economy of $100
million or more and is considered a major rule as defined by 5 U.S.C.
804(2). Thus, this rule is subject to a 60-day delayed effective date
under 5 U.S.C. 801(a)(3).
List of Subjects in 38 CFR Part 1
Administrative practice and procedure, Disability benefits,
Penalties, Pensions, Wages.
Signing Authority
Douglas A. Collins, Secretary of Veterans Affairs, approved this
document on November 5, 2025, and authorized the undersigned to sign
and submit the document to the Office of the Federal Register for
publication electronically as an official document of the Department of
Veterans Affairs.
Taylor N. Mattson,
Alternate Federal Register Liaison Officer, Department of Veterans
Affairs.
For the reasons stated in the preamble, the Department of Veterans
Affairs amends 38 CFR part 1 as set forth below:
PART 1--GENERAL PROVISIONS
0
1. The authority citation for part 1 continues to read as follows:
Authority: 38 U.S.C. 501, and as noted in specific sections.
0
2. Amend Sec. 1.963 by revising paragraph (b) and the sectional
authority to read as follows:
Sec. 1.963 Waiver; other than loan guaranty.
* * * * *
(b) Application. A request for waiver of an indebtedness under this
section shall only be considered if made within one year following the
date of a notice of indebtedness issued by the Department of Veterans
Affairs to the debtor. The one-year period may be extended if the
individual requesting waiver demonstrated to the Chairperson of the
Committee on Waivers and Compromises that, as a result of an error by
either the Department of Veterans Affairs or the postal authorities, or
due to other circumstances beyond the debtor's control, there was a
delay in such individual's receipt of the notification of indebtedness
beyond the time customarily required for mailing (including
forwarding). If the requester does substantiate that there was such a
delay in the receipt of the notice of indebtedness, the Chairperson
shall direct that the one-year period be computed from the date of the
requester's actual receipt of the notice of indebtedness.
[[Page 54236]]
(Authority: 38 U.S.C. 5302(a) and (c); Pub. L. 117-328, Title II,
Subtitle E, sec. 254 (Dec. 29, 2022), unless otherwise noted)
[FR Doc. 2025-21242 Filed 11-25-25; 8:45 am]
BILLING CODE 8320-01-P
</pre></body>
</html>Indexed from Federal Register on November 26, 2025.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.