VA Waiver of Indebtedness Exam Questions (2026): 15 Free Practice Questions with Answers

1. Under 38 U.S.C. 5302(a), VA may waive collection of an indebtedness when which standard is met?

1. A. The debtor asks politely in writing
2. B. Collection would be against equity and good conscience and not in the best interests of the United States
3. C. The debt is less than $1,000
4. D. The debtor is over age 65

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Answer: B. Under 38 U.S.C. 5302(a), the Secretary may waive indebtedness where collection would be against equity and good conscience and not in the best interests of the United States.

Why the tempting wrong answer fails: C invents a dollar threshold the statute does not contain.

Source: 38 U.S.C. 5302(a)

2. Under 38 CFR 1.965(a), the equity and good conscience determination considers which of the following elements?

1. A. Only the size of the debt
2. B. Fault of the debtor, whether collection would defeat the purpose of the benefit, unjust enrichment, whether the debtor changed position in reliance, and financial hardship, among other considerations
3. C. Only whether the debtor is currently employed
4. D. The political affiliation of the debtor

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Answer: B. Under 38 CFR 1.965(a), equity and good conscience weighs elements including fault, defeating the benefit’s purpose, unjust enrichment, detrimental reliance, and hardship.

Why the tempting wrong answer fails: A reduces a multi-element fairness test to a single number.

Source: 38 CFR 1.965(a)

3. Under 38 U.S.C. 5302(c), waiver of indebtedness is barred when the debt arose from which conduct?

1. A. Simple negligence in reporting income
2. B. Fraud, misrepresentation, or bad faith on the debtor’s part
3. C. Any overpayment greater than $5,000
4. D. Debts older than three years

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Answer: B. Under 38 U.S.C. 5302(c), there is no waiver authority where the indebtedness results from fraud, misrepresentation, or bad faith.

Why the tempting wrong answer fails: A describes fault, which weighs against waiver but does not bar it the way fraud does.

Source: 38 U.S.C. 5302(c)

4. Under 38 CFR 1.963, which body has jurisdiction to consider requests for waiver of indebtedness?

1. A. The Board of Veterans’ Appeals
2. B. The Committee on Waivers and Compromises
3. C. The regional office finance center acting alone
4. D. The U.S. Court of Appeals for Veterans Claims

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Answer: B. Under 38 CFR 1.963, the Committee on Waivers and Compromises has jurisdiction over waiver requests.

Why the tempting wrong answer fails: A decides benefits appeals; waiver jurisdiction sits with the Committee.

Source: 38 CFR 1.963

5. VA notifies a veteran of an overpayment debt on April 1, 2025. Under 38 CFR 1.963(b)(2), within what period must the veteran request a waiver?

1. A. Within 30 days of the notice
2. B. Within 60 days of the notice
3. C. Within 180 days of the notice
4. D. There is no deadline

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Answer: C. Under 38 CFR 1.963(b)(2), a waiver request must be submitted within 180 days after the date of the notice of indebtedness.

Why the tempting wrong answer fails: A confuses the waiver window with shorter response deadlines elsewhere in VA practice.

Source: 38 CFR 1.963(b)(2)

6. Under 38 CFR 1.965, the fault element in a waiver decision examines what?

1. A. Whether the debtor intended to defraud VA
2. B. The degree of the debtor’s fault in creating the overpayment, with greater fault weighing against waiver
3. C. Only whether VA made an administrative error
4. D. The debtor’s credit score

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Answer: B. Under 38 CFR 1.965, the debtor’s degree of fault in causing the debt is a central element; more fault makes waiver less likely.

Why the tempting wrong answer fails: A describes the fraud bar, a separate and stricter rule than the fault element.

Source: 38 CFR 1.965

7. A veteran spent an overpayment on basic living expenses, believing it was correct, and now cannot repay without losing housing. Under 38 CFR 1.965, which elements favor waiver?

1. A. None; spending the money proves fault
2. B. Detrimental reliance (changed position) and financial hardship (undue hardship), which both point toward equity and good conscience
3. C. Only the veteran’s age
4. D. Only the size of the monthly benefit

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Answer: B. Under 38 CFR 1.965, changing position in reliance on the payment and undue hardship from collection both favor a waiver.

Why the tempting wrong answer fails: A treats any spending as fault; good-faith reliance is precisely what this element protects.

Source: 38 CFR 1.965

8. Under 38 CFR 1.965, the unjust enrichment element asks what?

1. A. Whether the debtor’s neighbors also received overpayments
2. B. Whether failure to make restitution would leave the debtor unjustly enriched at the Government’s expense
3. C. Whether the debtor donated to charity
4. D. Whether VA’s budget can absorb the loss

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Answer: B. Under 38 CFR 1.965, the Committee considers whether the debtor would be unjustly enriched if not required to repay.

Why the tempting wrong answer fails: D looks at the Government’s side; the element examines the debtor’s enrichment.

Source: 38 CFR 1.965

9. Under 38 CFR 1.964, a request for waiver of indebtedness must be submitted in what form?

1. A. Orally by phone to the VA hotline
2. B. In writing, with the information specified in the regulation
3. C. On a napkin delivered to the regional office
4. D. Through a congressional inquiry only

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Answer: B. Under 38 CFR 1.964, waiver requests must be in writing and include the required information for the Committee’s review.

Why the tempting wrong answer fails: A fails the writing requirement; phone calls do not start the waiver process.

Source: 38 CFR 1.964

10. A veteran’s overpayment resulted from VA’s own administrative error; the veteran reported income correctly and on time. Under 38 CFR 1.965, how does the fault element apply?

1. A. It is irrelevant; only the debt amount matters
2. B. The absence of debtor fault weighs strongly in favor of waiver
3. C. It bars waiver because someone must repay
4. D. It requires referral to the fraud unit

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Answer: B. Under 38 CFR 1.965, where the debtor is without fault and the error was VA’s, the fault element points toward granting the waiver.

Why the tempting wrong answer fails: D confuses administrative error with fraud; they are opposites.

Source: 38 CFR 1.965

11. Under 38 U.S.C. 5302(a), waiver authority extends to which kinds of indebtedness?

1. A. Only education debts
2. B. Indebtedness resulting from participation in a VA benefits program, as specified in the statute
3. C. Private credit card debt
4. D. State tax debts

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Answer: B. Under 38 U.S.C. 5302(a), waiver covers indebtedness arising from VA benefits programs, not private or state debts.

Why the tempting wrong answer fails: C and D are outside VA’s waiver authority entirely.

Source: 38 U.S.C. 5302(a)

12. While a waiver request is pending before the Committee on Waivers and Compromises, what generally happens to collection action on the debt?

1. A. Collection continues at full pace with no pause
2. B. Collection action is generally held in abeyance pending the waiver decision
3. C. The debt is automatically forgiven
4. D. The debt doubles as a penalty for requesting waiver

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Answer: B. Under VA’s debt procedures in 38 CFR 1.963, collection is generally suspended while a timely waiver request is pending decision.

Why the tempting wrong answer fails: C confuses a pending request with a granted waiver.

Source: 38 CFR 1.963

13. Under 38 CFR 1.965, the “defeat the purpose” element considers whether collection would do what?

1. A. Embarrass the debtor publicly
2. B. Defeat the purpose of the VA benefit by depriving the veteran of the support the benefit was meant to provide
3. C. Reduce VA’s administrative costs
4. D. Delay other veterans’ claims

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Answer: B. Under 38 CFR 1.965, waiver is favored where collecting would defeat the very purpose of the benefit, such as stripping support the benefit exists to provide.

Why the tempting wrong answer fails: A personalizes an element that is about the benefit’s statutory purpose.

Source: 38 CFR 1.965

14. A debtor disagrees with the Committee on Waivers and Compromises’ denial of a waiver. What review is available?

1. A. No review of any kind is ever available
2. B. The debtor may seek further review within VA’s administrative process as provided by regulation
3. C. Only the President can reverse it
4. D. The debtor must file a new waiver request every 30 days forever

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Answer: B. Committee waiver decisions are subject to further administrative review within VA as the regulations provide, rather than being wholly unreviewable.

Why the tempting wrong answer fails: A overstates finality; administrative review channels exist.

Source: 38 CFR 1.963

15. Which statement best distinguishes waiver from compromise of VA indebtedness?

1. A. They are identical; the terms are interchangeable
2. B. Waiver forgives collection where equity and good conscience require it under 38 U.S.C. 5302; compromise accepts less than the full amount as settlement of the debt
3. C. Compromise is only for fraud cases
4. D. Waiver requires a court order but compromise does not

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Answer: B. Waiver under 38 U.S.C. 5302 excuses collection on fairness grounds, while compromise settles the debt for less than the full balance. Both run through the Committee framework in 38 CFR 1.963.

Why the tempting wrong answer fails: A collapses two distinct legal concepts into one.

Source: 38 U.S.C. 5302; 38 CFR 1.963