Audit of VHA’s Education Debt Reduction Program

The VA Office of Inspector General (OIG) assessed how effectively the Veterans Health Administration (VHA) administered the Education Debt Reduction Program, a critical tool used to recruit and retain healthcare professionals for hard-to-fill positions. Under the authority of the MISSION Act, this program provides up to $200,000 in tax-free student loan repayment benefits for qualifying employees.

From fiscal year 2023 through 2025, VHA disbursed about $445 million in loan repayments to 15,000 employees. The OIG reviewed a sample of records for employees who received reimbursements between October 1, 2022, and November 1, 2025, to evaluate compliance with statutory requirements and VHA policy.

The audit found that VHA has a structured framework for processing applications and that most participants were eligible for the program. Of 109 sampled applications, 95 were processed in accordance with VHA Handbook 1021.01 and Records Control Schedule 10-1. However, the OIG identified several areas where VHA could strengthen controls and governance. These included isolated documentation and eligibility errors, insufficient requirements for maintaining evidence of employee service and performance, and challenges reconciling program funds annually.

The OIG questioned about $160,400 in costs, including about $63,500 in improper payments. Additionally, officials reported that $24.3 million in program funds from the audit period remained unreconciled, underscoring the need for stronger financial oversight.

VHA concurred with the OIG’s two recommendations focused on improving documentation practices and strengthening reconciliation controls. The OIG will close these recommendations once VHA provides evidence of effective corrective action.