[Federal Register Volume 61, Number 112 (Monday, June 10, 1996)]
[Rules and Regulations]
[Pages 29294-29297]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14363]



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DEPARTMENT OF VETERANS AFFAIRS
38 CFR Part 21

RIN 2900-AH31


Educational Assistance Programs and Service Members Occupational 
Conversion and Training Act Program

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This document amends the educational assistance regulations 
and the Service Members Occupational Conversion and Training Act 
(SMOCTA) regulations. It restates statutory provisions of the Veterans' 
Benefits Improvement Act of 1994 and the National Defense Authorization 
Act for Fiscal Year 1995. It also makes changes to set forth statutory 
interpretations of the Department of Veterans Affairs (VA), to reflect 
current organizational structure within VA, and to provide 
clarification. These changes affect the Survivors' and Dependents' 
Educational Assistance program, the Montgomery GI Bill--Active Duty 
program, the Montgomery GI Bill--Selected Reserve program, the SMOCTA 
program, and the Post-Vietnam Era Veterans' Educational Assistance 
program (VEAP).

EFFECTIVE DATE: This final rule is effective June 10, 1996. For more 
information concerning the application of the provisions of the final 
rule, see the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: June C. Schaeffer, Assistant Director 
for Policy and Program Administration, Education Service, Veterans 
Benefits Administration, (202) 273-7187.

SUPPLEMENTARY INFORMATION: This document amends regulations in 38 CFR 
Part 21. It amends educational assistance regulations concerning the 
Survivors' and Dependents' Educational Assistance program in subpart C 
and the Montgomery GI Bill--Active Duty program in subpart K. Also, 
this document makes changes to the administrative provisions in subpart 
D that affect the Survivors' and Dependents' Educational Assistance 
program, the Montgomery GI Bill--Active Duty program, the Montgomery GI 
Bill--Selected Reserve program, and VEAP. Further, this document amends 
the SMOCTA regulations in subpart F-3.
    The Veterans' Benefits Improvement Act of 1994 (Pub. L. 103-446) 
contains many provisions that affect the Montgomery GI Bill--Active 
Duty program. These include making vocational flight training 
permanently available under the Montgomery GI Bill--Active Duty 
program; permitting approval of alternative teacher certification 
programs for training under the Montgomery GI Bill--Active Duty 
program; eliminating VA's authority to functionally supervise State 
approving agencies; restricting approved correspondence courses to 
accredited courses; and permitting approval of programs of education 
offered by foreign educational institutions when those programs include 
courses offered away from the institution's main campus. Accordingly, 
the regulations in subparts D and K are amended to incorporate the 
statutory changes.
    Pursuant to Pub. L. 103-446, the provisions concerning alternative 
teacher certification do not apply to the Survivors' and Dependents' 
Educational Assistance program, and regulations in subpart C governing 
that program are revised to clarify that fact. The provisions of Pub. 
L. 103-446 also provide that certain recipients of Survivors' and 
Dependents' Educational Assistance in the Philippines who were being 
paid at the rate equivalent to 50 cents on the dollar in Philippine 
pesos will now be paid in U.S. dollars. The regulations in subpart C 
are amended accordingly. We also made various changes to SMOCTA 
regulations in subpart F-3 to reflect the statutory changes made by 
Pub. L. 103-446. In this regard, the SMOCTA regulations are amended by 
eliminating the prohibition against training programs that lasted more 
than 18 months, by eliminating provisions that required a two week wait 
before a veteran could begin a training program, and by adding an 
aggregate limit of not more than $10,000 or $12,000, as applicable, 
that could be paid to employers when a trainee was in more than one 
training program.
    The National Defense Authorization Act for Fiscal Year 1995 (Pub. 
L. 103-337) contains provisions permitting additional members of the 
Coast Guard to qualify for the Montgomery GI Bill--Active Duty program. 
The regulations in subpart K are amended to reflect the statutory 
change.
    VA is prohibited by statute from approving the enrollment of an 
eligible veteran in a course if 85% or more of the students enrolled in 
the course are VA-supported. In this regard, vocational flight training 
is now a permanent part of the Montgomery GI Bill--Active Duty program, 
the Montgomery GI Bill--Selected Reserve program, and VEAP. The 
regulations are amended by providing that solo flight training and 
training in flight simulators are to be included in the calculations 
for determining whether the 85%-15% requirement has been met in flight 
courses. This is necessary since in our

[[Page 29295]]

view 38 U.S.C. 3680A(d) requires that when educational assistance may 
be paid to eligible veterans for any courses, those courses are subject 
to the 85%-15% requirement.
    The regulations in subpart D are amended by eliminating references 
to the Director, Vocational Rehabilitation and Education Service, a 
position that no longer exists; by removing an obsolete reference to 
eligibility requirements under the old Vietnam Era GI Bill from the 
regulations concerning training in foreign schools, since there no 
longer is any eligibility under the Vietnam Era GI Bill; and 
clarifying, consistent with the requirements of Pub. L. 103-446, that a 
person eligible under the Montgomery GI Bill--Active Duty program and 
the Montgomery GI Bill--Selected Reserve program may train in foreign 
schools.
    Pub. L. 103-446 contains a provision that requires any entity 
offering an alternative teacher certification program to be considered 
to be an educational institution for VA purposes during the period 
beginning on November 2, 1994, and ending on September 30, 1996. This 
document amends subparts D and K to reflect this statutory change.
    This document also amends subparts D and K by adding a definition 
of ``alternative teacher certification program'' as follows:

    The term alternative teacher certification program, for the 
purposes of determining whether an entity offering such a program is 
a school, educational institution or institution as defined in * * * 
this section, means a program leading to a teacher's certificate 
that allows individuals with a bachelor's degree or graduate degree 
to obtain teacher certification without enrolling in an institution 
of higher learning.

    We believe this is consistent with congressional intent.
    The educational assistance regulations in subparts C, D, and K and 
the SMOCTA regulations in subpart F-3 are further amended by making 
other changes for purposes of clarification.
    The restatements of statute and statutory interpretations of Pub. 
L. 102-484 and Pub. L. 103-446 contained in this final rule will be 
applied retroactively from the effective dates of the statutory 
provisions. However, the revisions concerning the internal VA 
reorganization and other clarifications will be applied from the 
effective date of the rule. Dates of application for provisions covered 
by this document are as follows:

Oct. 1, 1994: Sec. 21.7120.
Oct. 5, 1994: Sec. 21.7045.
Nov. 2, 1994: Secs. 21.3333, 21.4152, 21.4155, 21.4200, 21.4250(f), 
21.4820, 21.4830, 21.4832, and 21.7020.
Jan. 31, 1995: Secs. 21.4252(e) and 21.4279.
June 10, 1996: Secs. 21.4201 and 21.4260.

    This document makes no substantive changes. It restates statutory 
provisions, sets forth statutory interpretations, reflects current 
organizational structure within VA, and makes changes for 
clarification. Accordingly, there is a basis for dispensing with prior 
notice and comment and delayed effective date provisions of 5 U.S.C. 
552 and 553.
    The Secretary of Veterans Affairs 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. This final rule makes no substantive 
changes. Pursuant to 5 U.S.C. 605(b), this final rule, therefore, is 
exempt from the initial and final regulatory flexibility analyses 
requirements of sections 603 and 604.
    The Catalog of Federal Domestic Assistance numbers for programs 
affected by this final rule are 64.117, 64.120, and 64.124. No Catalog 
of Federal Domestic Assistance number has been assigned to the 
Montgomery GI Bill--Selected Reserve program or the training programs 
under the Service Members Occupational Conversion and Training Act.

List of Subjects in 38 CFR Part 21

    Administrative practice and procedure, Armed forces, Civil rights, 
Claims, Colleges and universities, Conflict of interests, Defense 
Department, Education, Employment, Grant programs--education, Grant 
programs--veterans, Health care, Loan programs--education, Loan 
programs--veterans, Manpower training programs, Reporting and 
recordkeeping requirements, Schools, Travel and transportation 
expenses, Veterans, Vocational education, Vocational rehabilitation.

    Approved: May 31, 1996.
Jesse Brown,
Secretary of Veterans Affairs.

    For the reasons set out in the preamble, 38 CFR part 21 is amended 
as set forth below.

PART 21--VOCATIONAL REHABILITATION AND EDUCATION

Subpart C--Survivors' and Dependents' Educational Assistance Under 
38 U.S.C. Chapter 35

    1. The authority citation for subpart C is revised to read as 
follows:

    Authority: 38 U.S.C. 501(a), 512, 3500-3566, unless otherwise 
noted.

    2. In Sec. 21.3021, paragraph (k) is redesignated as paragraph (l); 
and new paragraph (k) is added and newly redesignated paragraph (l) is 
revised, to read as follows:


Sec. 21.3021  Definitions.

* * * * *
    (k) School, educational institution, institution. The terms school, 
educational institution and institution mean:
    (1) A vocational school or business school;
    (2) A junior college, teachers' college, college, normal school, 
professional school, university, or scientific or technical 
institution;
    (3) A public or private secondary school;
    (4) A training establishment as defined in Sec. 21.4200(c); or
    (5) An institution that provides specialized vocational training, 
generally recognized as on the secondary school level or above, for 
people with mental or physical disabilities.

(Authority: 38 U.S.C. 3501(a)(6), 3535)
* * * * *
    (l) Additional definitions. The definitions of all terms that are 
defined in Sec. 21.4200 but that are not defined in this section apply 
to subpart C of this part.

(Authority: 38 U.S.C. 501, 3501)
* * * * *
    3. In Sec. 21.3333, paragraph (c) is revised to read as follows:


Sec. 21.3333  Rates.

* * * * *
    (c) Payments made to eligible persons in the Republic of the 
Philippines or to certain Filipinos. When the eligible person is 
pursuing training at an institution located in the Republic of the 
Philippines or when an eligible child's entitlement is based on the 
service of a veteran in the Philippine Commonwealth Army, or as a 
Philippine Scout as defined in Sec. 3.8(b), (c), or (d) of this 
chapter, payments of special training allowance made after December 31, 
1994, will be made at the rate of 50 cents for each dollar authorized.

(Authority: 38 U.S.C. 3532(d), 3542, 3565)
* * * * *

Subpart D--Administration of Educational Assistance Programs

    4. The authority citation for subpart D continues to read as 
follows:

    Authority: 10 U.S.C. ch. 1606; 38 U.S.C. 501(a), chs. 30, 32, 
34, 35, 36, unless otherwise noted.


[[Page 29296]]




Sec. 21.4155  [Amended]

    5. In Sec. 21.4152, paragraph (a) is amended by removing ``Except 
as provided in Sec. 21.4155 of this part, no'' and adding, in its 
place, ``No''.


Sec. 21.4152  [Amended]

    6. In Sec. 21.4155, paragraph (b) is removed and paragraphs (c) and 
(d) are redesignated as paragraphs (b) and (c), respectively.
    7. In Sec. 21.4200, paragraph (a) is revised and paragraph (w) is 
added, to read as follows:


Sec. 21.4200  Definitions.

    (a) School, educational institution, institution. The terms school, 
educational institution and institution mean:
    (1) A vocational school or business school;
    (2) A junior college, teachers' college, college, normal school, 
professional school, university, or scientific or technical 
institution;
    (3) A public or private elementary school or secondary school;
    (4) A training establishment as defined in paragraph (c) of this 
section; or
    (5) Any entity during the period beginning on November 2, 1994, and 
ending on September 30, 1996, other than an institution of higher 
learning, that provides training for completion of a State-approved 
alternative teacher certification program.

(Authority: 38 U.S.C. 3452)
* * * * *
    (w) Alternative teacher certification program. The term alternative 
teacher certification program, for the purposes of determining whether 
an entity offering such a program is a school, educational institution, 
or institution as defined in paragraph (a)(5) of this section, means a 
program leading to a teacher's certificate that allows individuals with 
a bachelor's degree or graduate degree to obtain teacher certification 
without enrolling in an institution of higher learning.

(Authority: 38 U.S.C. 3452(c))
* * * * *
    8. In Sec. 21.4201, paragraph (e)(3)(ii) introductory text is 
amended by removing ``part 141, Title 14, Code of Federal Regulations'' 
in each place and adding, in its place, ``14 CFR part 141''; paragraphs 
(e)(3)(ii)(B) and (e)(3)(ii)(C) are removed; paragraphs (e)(3)(ii)(D) 
and (e)(3)(ii)(E) are redesignated as paragraphs (e)(3)(ii)(B) and 
(e)(3)(ii)(C), respectively; and the section heading and newly 
redesignated paragraph (e)(3)(ii)(C) are revised to read as follows:


Sec. 21.4201  Restrictions on enrollment; percentage of students 
receiving financial support.

* * * * *
    (e) * * *
    (3) * * *
    (ii) * * *
    (C) For students enrolled in courses not approved under 14 CFR part 
141, such as courses offered by flight simulator or courses for 
navigator or flight engineer, shall include ground training time or 
charges; actual logged instructional flight time or charges; and 
instructional time in a flight simulator or charges for that training.

(Authority: 10 U.S.C. 16136(c); 38 U.S.C. 3034(d), 3680A(d))
* * * * *
    9. In Sec. 21.4252, paragraph (e) is revised and paragraph (f) is 
added, to read as follows:


Sec. 21.4252  Courses precluded.

* * * * *
    (e) Correspondence courses. (1) VA will not approve the enrollment 
of an individual under 10 U.S.C. Chapter 1606 or 38 U.S.C. Chapter 30, 
32, or 35 in a correspondence course or the correspondence portion of a 
correspondence-residence course unless the course is accredited and 
meets the requirements of Secs. 21.4253, 21.4256, and 21.4279, as 
appropriate.
    (2) VA will not approve the enrollment of an eligible child under 
38 U.S.C. Chapter 35 in a correspondence course or the correspondence 
portion of a correspondence-residence course.

(Authority: 38 U.S.C. 3534(b))

    (f) Alternative teacher certification program. VA will not approve 
the enrollment of an eligible person under 38 U.S.C. Chapter 35 in an 
alternative teacher certification program unless that program is 
offered by an institution of higher learning as defined in 
Sec. 21.4200(h).

(Authority: 38 U.S.C. 3452(c), 3501(a)(6))
* * * * *
    10. In Sec. 21.4260, paragraphs (b)(2), (b)(3)(ii)(B), (b)(5), and 
(b)(6) are amended by removing ``Vocational Rehabilitation and''; 
paragraph (c)(1) is amended by removing ``of eligible'' and adding, in 
its place, ``or eligible''; and paragraphs (c)(1)(i), (c)(1)(ii), and 
(c)(2) are revised to read as follows:


Sec. 21.4260  Courses in foreign countries.

* * * * *
    (c) * * *
    (1) * * *
    (i) The eligible person, serviceperson, veteran, or reservist meets 
the eligibility and entitlement requirements of either Secs. 21.3040 
through 21.3046, Secs. 21.5040 and 21.5041, Secs. 21.7040 through 
21.7045, or Sec. 21.7540, as appropriate;
    (ii) The eligible person's, serviceperson's, veteran's, or 
reservist's program of education meets the requirements of either 
Sec. 21.3021(h), Sec. 21.5230, Sec. 21.7020(b)(23), or 
Sec. 21.7520(b)(17), as appropriate; and
* * * * *
    (2) VA may deny or discontinue the payment of educational 
assistance allowance to a veteran, serviceperson, eligible person or 
reservist pursuing a course in an institution of higher learning not 
located in a State when VA finds that the veteran's, serviceperson's, 
eligible person's, or reservist's enrollment is not in his or her best 
interest or the best interest of the Federal Government.

(Authority: 38 U.S.C. 3687)

    11. In Sec. 21.4279, paragraph (b) introductory text and paragraph 
(b)(1) are revised to read as follows:


Sec. 21.4279  Combination correspondence-residence program.

* * * * *
    (b) Payment for pursuit of a correspondence-residence program. The 
rate of educational assistance payable to a spouse or surviving spouse 
under 38 U.S.C. Chapter 35 for the residence portion of a 
correspondence-residence course or program shall be computed as set 
forth in Secs. 21.3131(a) and 21.4270.
    (1) The charges for that portion of the course or program pursued 
exclusively by correspondence will be in accordance with 
Sec. 21.3131(a) with 1 month entitlement charged for each $404 of cost 
reimbursed.

(Authority: 38 U.S.C. 3534)
* * * * *

Subpart F-3--Service Members Occupational Conversion and Training 
Program

    12. The authority citation for subpart F-3 is revised to read as 
follows:

    Authority: 10 U.S.C. 1143 note; sec. 4481-4497, Pub. L. 102-484, 
106 Stat. 2757-2769; sec. 610, Pub. L. 103-446, 108 Stat. 4673-4674, 
unless otherwise noted.

    13. Section 21.4820 is amended by removing paragraph (a)(3) 
introductory text; redesignating paragraphs (a)(3)(i) and (a)(3)(ii) as 
paragraphs (a)(3) and (a)(4), respectively; and paragraph (a)(1) and 
newly redesignated paragraph (a)(4) are revised to read as follows:


Sec. 21.4820  Job training program approval.

    (a) * * *
    (1) The training provided under an employer's job training program 
must be in a field of employment providing a

[[Page 29297]]

reasonable probability of stable, long-term employment and such 
training must be provided for a period of not less than 6 months.
* * * * *
    (4) If a job training program requires more than 18 months (or the 
equivalent in training hours) of training to complete, the period of 
training approvable for purposes of this subpart will be limited to the 
first 18 months (or the equivalent in training hours) of training under 
that program, or a period of training not to exceed 18 months (or the 
equivalent in training hours) from the point at which the eligible 
person enters the program in the case where the employer grants credit 
for prior training. (See Sec. 21.4832(a)(3)).

(Authority: 10 U.S.C. 1143 note; sec. 4481-4497, Pub. L. 102-484, 
106 Stat. 2757-2769, as amended by sec. 610, Pub. L. 103-446, 108 
Stat. 4673-4674)
* * * * *
    14. In Sec. 21.4830, paragraph (b)(2) is revised to read as 
follows:


Sec. 21.4830  Entrance into training.

* * * * *
    (b) * * *
    (2) The eligible person may enter the job training program on or 
after the date the notice of intent to hire described in paragraph (a) 
of this section is submitted to VA. However, VA may not provide 
assistance to the employer if, within two weeks after the date on which 
the notice of intent to hire is transmitted to VA, VA disapproves the 
eligible person's entry into that program due to a lack of funds.
* * * * *
    15-16. In Sec. 21.4832, paragraph (d)(1) introductory text is 
revised to read as follows:


Sec. 21.4832  Payments to employers.

* * * * *
    (d) Limitations on amount of payments. (1) In no case will the sum 
of the periodic payments and the lump-sum payment made to an employer 
for all programs of training that an eligible veteran may pursue with 
that employer exceed:
* * * * *

Subpart K--All Volunteer Force Educational Assistance Program 
(Montgomery GI Bill--Active Duty)

    17. The authority citation for subpart K is revised to read as 
follows:

    Authority: 38 U.S.C. 501(a), chs. 30, 36, unless otherwise 
noted.

    18. In Sec. 21.7020, paragraph (b)(29) is revised and paragraph 
(b)(43) is added, to read as follows:


Sec. 21.7020  Definitions.

* * * * *
    (b) * * *
    (29) School, educational institution, institution. The terms 
school, educational institution, and institution mean--
    (i) Any vocational school, correspondence school, business school, 
junior college, teachers' college, college, normal school, professional 
school, university or scientific or technical institution;
    (ii) Any public or private elementary school or secondary school 
which offers courses for adults, provided that the courses lead to an 
objective other than an elementary school diploma, a high school 
diploma or their equivalents; and
    (iii) An entity, during the period beginning on November 2, 1994, 
and ending on September 30, 1996, other than an institution of higher 
learning, that provides training required for completion of a State-
approved alternative teacher certification program.

(Authority: 38 U.S.C. 3002(8), 3452(c); Pub. L. 98-525, Pub. L. 103-
446)
* * * * *
    (43) Alternative teacher certification program. The term 
alternative teacher certification program, for the purposes of 
determining whether an entity offering such a program is a school, 
educational institution or institution as defined in paragraph 
(b)(29)(iii) of this section, means a program leading to a teacher's 
certificate that allows individuals with a bachelor's degree or 
graduate degree to obtain teacher certification without enrolling in an 
institution of higher learning.

(Authority: 38 U.S.C. 3452(c))

    19. In Sec. 21.7045, paragraph (a)(1), paragraph (b), introductory 
text, and the authority citations for paragraphs (a) and (b) are 
revised, to read as follows:


Sec. 21.7045  Eligibility based on involuntary separation or voluntary 
separation.

* * * * *
    (a) * * *
    (1) The individual--
    (i) If not a member of the Coast Guard, must be on active duty or 
full-time National Guard duty either on September 30, 1990, or after 
November 29, 1993, or if a member of the Coast Guard, must be on active 
duty after September 30, 1994, and
    (ii) After February 2, 1991, must be involuntarily separated, as 
that term is defined in 10 U.S.C. 1141, with an honorable discharge; or
* * * * *
(Authority: 10 U.S.C. 1141; 38 U.S.C. 3018A)
    (b) Additional requirements for those individuals voluntarily 
separated after October 23, 1992, or involuntarily separated. An 
individual who meets the requirements of paragraph (a)(1) of this 
section; or an individual who meets the requirements of paragraph 
(a)(2) of this section and who either was not a member of the Coast 
Guard and was separated after October 22, 1992, or who was a member of 
the Coast Guard and was separated after September 30, 1994, must meet 
the following additional requirements in order to establish eligibility 
for educational assistance:
* * * * *
(Authority: 38 U.S.C. 3018B)
* * * * *


Sec. 21.7120  [Amended]

    20. In Sec. 21.7120, paragraph (c)(1)(ii)(D) is amended by removing 
``and before October 1, 1994''.

[FR Doc. 96-14363 Filed 6-7-96; 8:45 am]
BILLING CODE 8320-01-P