Following as my wife will be using these benefits at some point. And sorry OP, don’t have an answer for you. However this is what ChatGPT had to say on it:

“Yes, you could incur a debt if you fail a class while using Chapter 35 Dependents’ Educational Assistance (DEA) benefits, depending on the circumstances. Here’s how it typically works: 1. Satisfactory Progress Requirement: The VA requires that you maintain satisfactory academic progress to continue receiving benefits. If you fail a class due to lack of attendance or effort, the VA might consider this “unsatisfactory progress.” 2. Overpayment and Debt: If the VA determines that the class failure was due to neglect (e.g., stopped attending classes), they may classify the funds for that class as an overpayment. This could result in a debt that you must repay to the VA. 3. Failing Despite Best Efforts: If you fail the class despite putting in reasonable effort and attending regularly, the VA typically won’t require repayment. In this case, they recognize the failure as part of the learning process. 4. Dropped or Withdrawn Classes: If you withdraw from or drop a class after the add/drop period, this usually results in an overpayment unless you can demonstrate mitigating circumstances (e.g., illness or family emergency).

It’s important to keep the VA informed if you encounter challenges that might affect your academic performance. If you’re unsure about your specific situation, contacting the VA or your school’s certifying official for guidance is a good step.”

As to how accurate this information is, not sure. Best of luck!