I just got my free annual credit report, and I saw one adverse listing, from “U.S. DEPT OF VETS AFFAIR.” This is because I receive the Montgomery GI bill. At the beginning of the spring semester I told them I was going to be a full time student, and indeed I was. But at the last possible instant, I decided to drop a class. They told me I owed them 1/4 of the money they had given me up to that point and transferred me to their debt department. So I found myself in this odd situation of being in debt to a government institution that has agreed to put aside a pool of money to help me pay for college. Even as they continue to give me money from this pool, I am in debt to them and slowly paying this off out of that pool. And now I just found that they are reporting this debt as outstanding to the credit bureaus, and this is the only negative mark I have.
I’m not just offended, I’m confused. Why are they doing this, and why is it legal for them to do so? How does this involve credit?